Should We Save for Retirement or College?

Dollars & Sense on 03.17.11
Contributor bio | twitter

Photo credit:  Josiah Mackenzie/Creative Commons

Let's say you're like me and you have very little wiggle room in your budget:  maybe $100 dollars to sock away each month.  And everyone keeps talking about 401Ks and 457s and 529s.  You get so stressed because not only do you feel behind the game, but confused about how to even play the game.

With an almost desperate air, I used to pose the retirement vs. college question to any financial adviser I could grab.  No one would give me a satisfying answer.   Finally, my shoulders dropped an entire inch when I read this tenet in Money magazine:

Saving for your own retirement is more important than saving for college.

Why?  Because you can't get a loan to fund your golden years.  Your kid can.  It's as simple as that.

Maybe you didn't want your child to have to pay for her own schooling.  But if you don't put your own oxygen mask on first, she may be burdened with giving you mouth-to-mouth when you're old, feeble and ... poor.  No one wants that.

Maybe you will pay off your child's student loan.  Maybe by the time your kid is 18, the college tuition bubble will have popped and you'll actually be able to afford it.  Maybe more and more colleges will follow Harvard and Yale's lead and offer significant tuition reductions to middle-class families.

There are a lot of unknowns about the college years, but one thing we know for sure is that some day we are not going to work anymore.

I'm still stressed that we won't have enough to afford a comfortable life when we're white and wrinkly.  But at least I'm not confused as to where to put that cash gift from grandpa or that Christmas bonus. 

And really, I know that my children will be all right.  It would be great to fund their higher education without worrying about debt and summer jobs.  But I've realized that, even though it sounds selfish, the biggest gift I can give them is to take care of myself.

Top Articles on College Education
10 Tips for Saving Money in College
Little People, Big World:  Jeremy Goes to College (Video)
Are Any of the Kids Talking About College?