Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



You're on Your Own, Kiddos

Whose future is more important in your household: Yours, or your kids'?

Before you answer, would you feel any better knowing that one-third of those with school-age children in the home put their retirement savings ahead of their offspring's college funds?

Go ahead, admit it. You're a bit relieved to know that others are shortchanging Junior's college savings account in favor of their own "golden years" account. In fact, according to a recent survey by Allstate (NYSE: ALL  ) , 33% of respondents with children younger than 18 say that college savings is priority No. 2. Another 46% percent are saving equally for college and retirement, and 14% -- the selfless souls -- earmark most of their savings for education and funnel whatever's left over into their retirement accounts. Another 5% are putting off retirement savings altogether until the kids are through college.

If we need to make a choice, we side with the one-third of parents padding their future savings over that of their kids'. And it's not self-centered -- it's pragmatic.

There are lots of ways to pay for school -- loans, financial aid, the Coverdell ESA, 529 plans, and prepaid tuition are the saviors of parents' retirement plans. And cash-strapped students pursuing an education have even more alternatives -- put it off, attend a cheaper junior college for a few years, apply for a work-study program.

On the other hand, there's no retirement scholarship -- no Pell Grant for senior citizens, no scholarships to gain entry into the Sunset Years Retirement Village. If you don't have money for retirement, guess what? You can't retire.

College savings is only part of a broader financial plan. Before you set up your child's future, pay off your high-interest debt, establish an emergency fund, get adequate insurance, and beef up your retirement savings. After you've crossed all of those items off your list, you can start spoiling the youngsters.

For more on handling the financial hassles of higher education:

  • Here's how one parent manages his sons' college investments, and some resources for the resourceful parent.
  • Asset allocation isn't just for retirees. There are typical allocation guidelines designed to protect Buffy's lunch money from the stock market's ups and downs.
  • Even with rising tuitions, college costs are just a fraction of a fraction of what you'll burn through in retirement, and they may not even be as steep as you anticipate.
  • If you're starting late with the college savings program, don't fret. One in five parents hasn't put away even a dime, according to a Sallie Mae study. Follow these six tips for slacker parents.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 490008, ~/Articles/ArticleHandler.aspx, 10/27/2016 11:19:06 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,197.84 -1.49 -0.01%
S&P 500 2,136.36 -3.07 -0.14%
NASD 5,233.90 -16.36 -0.31%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 11:03 AM
ALL $67.83 Down -0.11 -0.16%
Allstate CAPS Rating: ****