September is College Savings Month, so it’s a good time to think about how to best prepare for future education costs. One question that often comes up is whether parents should dip into retirement savings to pay for college.
According to one study, 21% of families expect to take a withdrawal from their retirement accounts to help cover college costs. That raises the question: is this the right move for you?
Here are three things to consider first:
1. Retirement is a necessity; college funding is a choice.
Your financial security in retirement should be your top priority. Unlike retirement, which has no loans or scholarships, college expenses can often be managed in other ways.
2. There are multiple ways to pay for higher education.
Scholarships, grants, part-time work, help from extended family, and student contributions can all play a role in covering tuition and related expenses
3. Look at cost-saving college options.
Starting at a community college, attending an in-state school, or fulfilling general education requirements at a lower-cost institution can significantly reduce the total bill.
College and retirement are both big goals, and the good news is you don’t have to choose one over the other. We can help you explore strategies to balance both retirement and college savings, but the key is to start planning now. College Savings Month is the perfect reminder to get started.