Education and Retirement: The time to plan for the future is NOW.
Choosing the right college or deciding when to retire takes a lot of time, research and consideration.
So why would planning for how to pay for these life events be any different?
Regardless of your financial needs, it is never too early to start budgeting and practicing good habits to help erase uncertainty and secure your goals.
Most experts say that you need to save for yourself first, and then start saving for your children's education. Although most of us recognize the importance of sound retirement planning, the multitude of investment possibilities and complex rules governing retirement plans mean that most people don't even know where to begin.
To determine how much you will need to save to maintain your current standard of living in retirement, you must first ask yourself a few questions:
- At what age do you plan to retire?
- What kind of lifestyle do you hope to maintain during your retirement years?
- What is your life expectancy?
- What rate of growth can you expect from your savings now and during retirement?
- Do you expect to dip into your principal?
At this point you can begin to take stock of your estimated future assets and income and determine the right tools and budget to save accordingly for your nest egg.
Once you have a general idea of how much higher education might cost for your son or daughter, it is important to ask yourself the following questions:
- How much do you have saved currently?
- How much do you think you'll be able to save on a monthly basis going forward?
- In addition to personal savings, what are some other financial options to explore (e.g. 529 plans, student loans, grants and scholarships)?
Start making your financial blueprint a reality.
It's never too early to start planning for your future, whether it's your nest egg for retirement or savings to send your child to college. Ideally, retirement planning begins as early as your 20s, and education planning should begin as soon as the little ones arrive (or even before). Contact the financial experts at Zinner & Co. LLP to start planning for your future goals.