Many parents perceive a conflict between funding a child's college education and building their own retirement nest egg.  The conflict usually arises from a lack of financial resources to do both while funding daily living expenses, so parents become stuck between priorities and usually wind up doing nothing at all.

One of the things a Personal Family Lawyer� can help you do is sort out your priorities in a way that supports your family for the long-term.  With that in mind, here are some guidelines on striking a balance between saving for your retirement and your child's education:

Build an emergency fund first.  This should be 3-6 months of living expenses that you have saved to fall back on in an emergency.  If you don't have it, you will likely be forced to raid your 401(k) or other retirement account, spending more for penalties and taxes to cover the cost of the emergency.

Save for your retirement or build a business to fund your retirement second.  It is difficult for many parents to accept that they may not be able to fully fund a child's college education, but consider the alternative.  You aren't being "selfless" if you spend what you should have saved for retirement or to create a business to fund your retirement on a child's education, and then run out of money right when your kids are having their own families and trying to save for their own retirement.  Then you will be financially dependent on them - just what you (and they) don't want.  There's a reason there are loans for education but not for retirement.

Save for your kids' college education last.  Only after you have funded your emergency stash and your own retirement accounts (or built a business to fund your retirement) should you funnel cash to a child's education fund.  If you invest in a 529 college savings plan, the earnings grow tax-free.  Also, other people in your child's life -- like grandparents and generous aunts and uncles -- can contribute as much as $14,000 per year (annual gift tax exclusion) to a child's 529 plan. 

If you would like to learn more about strategies for getting your financial future in balance, call our office today to schedule a time for us to sit down and talk.