Retirement savings should come before college funds

Posted: May 13, 2012 at 1:15 am

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Graduation is a proud day for parents and students, but saving for a child s college education shouldn t take precedence over saving for retirement.

CHICAGO -- Imagine if retirement were financed by scholarships, grants and loans.

You could qualify for a substantial aid package to pay for your senior years. Your stellar job "grades" and career achievements would be rewarded with significant merit aid.

Alas, no such aid exists. Paying for retirement is an expensive obligation that you have to handle on your own.

The one similarity with college is you likely will need to set aside money for many years in order to take care of it.

And if you need to save for your children's college as well as your own retirement, you've got a daunting challenge on your hands.

The cost of a college education continues to rise faster than inflation, at roughly 5 percent per year. The average sticker-price for four years at a private college is now more than $150,000 -- including $38,589 for the 2011-12 school year. Even going to your state's university runs close to half that total at an average $17,131 a year, according to the College Board.

Retirement is far more expensive than that.

How do you balance those important objectives? Here are some considerations to keep top-of-mind as you juggle both:

Put retirement first: Student loan debt has risen above $1 trillion and the average student's debt at graduation now exceeds $25,000, according to the Project on Student Debt. Hoping to keep their own kids from being overly burdened, parents often unwisely sink thousands of dollars into their

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Retirement savings should come before college funds

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May 13th, 2012 at 1:15 am

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