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.