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Retirement vs. College Saving: 3 Reasons to Put Yourself First

Prioritizing savings can be hard when you face multiple demands on your money. For those with kids, deciding whether to save for retirement or for your children's college education can be challenging, but there are good reasons to pick your own retirement first.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at three reasons why saving for retirement first generally makes sense. First, Dan notes that because retirement savings aren't treated as parental assets for financial aid purposes, your child can often get more aid if you put money into retirement accounts. Second, Dan points out that while there are many ways to finance a college education, running out of money in retirement leaves you with few options other than seeking help from family members. Lastly, Dan observes that many people can get rewards for saving for retirement, whether it's through the Saver's Tax Credit or a matching contribution for their 401(k) fund. In the end, it's important to prioritize well, but ideally, you should try to save enough to meet all your financial obligations.

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  • Report this Comment On March 08, 2014, at 5:33 PM, carlytx wrote:

    Saving/investing for your retirement should come first unless it is an emergency and funds can not be attained any other way. While funding your children's education or supporting them in other financial ways is noble do not do it at the expense of your retirement nest egg. Your children can take out loans for education. They have more time. The retirement site Retirement And Good Living has great information on this and many other retirement topics. And it has a blog of posts by guests from around the globe on various retirement issues. Worth checking out.

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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