A Parent's Dilemma: Save for College or Retirement?

Money Girl gives critical guidance and key facts for prioritizing saving for college and retirement.

Laura Adams, MBA
5-minute read
Episode #352

Should You Use Retirement Savings to Pay for College?

A word of caution: Don’t get antsy and break your retirement piggy bank to pay for college. Not only does that rob from your future, but early withdrawals are typically subject to income tax plus a 10% penalty, if you’re younger than age 59½.

Instead, create a financial plan that includes both college and retirement savings as soon as you start a family. No one said it will be easy. To accomplish both you might have to cut expenses, get a second source of income, send your child to a less expensive school, or work longer than you’d like.

The sooner you start saving, the less stress you’ll feel both psychologically and on your budget. And if you’re like Grysell and get a late start, don’t feel guilty. Remember that putting retirement first is actually in your entire family’s best interest.

A final tip to save for college is to earn cash back rewards every time you shop online, buy gas, or get groceries by joining Upromise for free.

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Cash Jar College Fund image courtesy of Shutterstock


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.