74% of parents in a recent T. Rowe Price survey said that saving for college was a higher priority for them than saving for retirement. It’s an understandable mistake: college is more immediate and top of mind. But many financial advisors are trying to remind parents that retirement is more important.
“I think it’s a classic example of put your own oxygen mask on yourself before you help the person next to you, even if that person is your kid,” said Mandi Woodruff, executive editor at the financial advice website MagnifyMoney. “I would certainly say for parents who are cash-strapped to focus on your own retirement nest egg first and foremost.” College is typically four years, while retirement may last 20 years or longer.
If you delay contributing to your retirement savings in order to fund college, you could run out of money in your golden years. What then? Many parents assume their grown-up kids will be there to help. A recent survey by NerdWallet found that 23% of the parents saving for retirement expect their kids to provide them with some financial support after they retire.
Parents are often reluctant to discuss family finances with their kids, but financial advisers say it’s important to have the college money talk. “Parents need to learn to say no to their children,” said Mark Kantrowitz, an expert on college financing and publisher of Savingforcollege.com. “Tell them you’ve saved a particular amount of money for their college education and that you can contribute so much money from your income.”
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