This post is the fifth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.
Money Mistake 5:
Forgetting whats most important: Retirement Savings
Once you’re faced with the monumental task of saving for your child’s college tuition, it’s easy to shrug off saving for retirement.
This is a mistake that I really could see myself slipping into. The reason for that is simple. My parents didn’t save for either, and as a result, I paid for my college education entirely. If it were not for my college loans, I would be in much more sound position financially. I do not want to do that to my children. It isn’t a fault of my parents, but I want to give my children the gift of a better financial situation when they finish school. So, yes, I can see myself saying to heck with the IRA and bring on the College savings account! Luckily, the easiest way around this is something that I already do. I participate in a employer sponsored 401(k) plan. My retirement money is on it’s way to my account before I even see it. That way it’s nearly impossible for me to redirect it into a college savings account. It is important that both parents have a retirement plan though, and my wife doesn’t have a plan that she contributes to at the moment. She can begin participating in her companies retirment plan next month!
Part 4: Delaying savings for college
Part 6: Postponing a Will