Jan 28, 2020
This week, we’re playing “would you rather” - retirement edition. We all have limited resources and with those limitations in mind, you’ll definitely need to make trade-offs in retirement. By thinking about these conundrums ahead of time, you’ll be equipping yourself to make thoughtful and smart decisions when the time comes.
Today’s “would you rather” question is: would you rather sacrifice your kid’s college or sacrifice your retirement? This is a common one that comes up often with my clients. Many of my clients delay retirement because they can’t afford to retire until after their youngest graduates from college and is off the parental payroll.
While this is understandable and there isn’t anything wrong with delaying retirement to support your college-age children, I often see parents taking the financial support of children to the point where it seriously compromises or even destroys their own chances for secure retirement.
Being a parent myself, I understand how making personal sacrifices to set your kids up for success comes with the territory, however, we must be careful when it comes to sacrificing our own retirement security for the sake of our children. While it’s not wise for kids to graduate college saddled with debt, a wise person once told me: You can get a loan for college, but you can’t get a loan for retirement.
This is sound advice. And it’s advice that parents of college-bound or college-age students tend to ignore. Financial support for college and to able-bodied adult children should only be provided to the extent that it doesn’t sacrifice your retirement security.
Some of you may disagree with that or think that you’re being selfish if you do that, but think about this: If you’re a burden to your children later in life because you ran out of money before you ran out of days, that’s likely going to be a much bigger cross to bear for your child than paying off student loans or going to community college for 2 years to reduce the cost of college.
That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.
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