Friday, August 26, 2011 Are You Hurting Your Own Chances At Retirement?
According to
a
recent article in the Wall Street Journal, many Baby Boomers are no longer
worried about when they will be able
to retire, but if they will be able to
retire at all. In many cases the reason for this worry stems not so much
from any kind of selfish inability to save, but from a tendency to be too generous.
In addition
to a growing trend (hinted at in the WSJ article above) of Baby Boomers tapping
their own retirement funds to help pay for the care of their elderly parents, this
article in USA Today warns of the all-too-common danger of Boomers shorting
their own retirements to pay for their children’s college educations.
“People are
willing to go to extreme measures because they value a college education so
highly... Among parents who are planning for their children's college, 24% say
that they tap their retirement accounts. And that doesn't reflect people who reduce
or halt retirement contributions [to make tuition payments.]”
One thing
that both of these articles agree on is that when it comes to saving money,
Boomers need to put their own needs first. While the immediate financial needs
of an elderly parent or college-bound child may feel more pressing, it’s a very bad idea to short your own
retirement account (and your future) to cover their costs. If you have an
elderly parent in need, before you dip into your own savings contact a good
elder law attorney who can help you review your (and your parent’s) options,
and help navigate the VA Benefits or Medicaid system if applicable.
As far as
college tuition goes, by neglecting your own retirement to pay for your
children’s college education you may simply be perpetuating a dangerous cycle,
putting your children in the position of having to pay for your expenses when your savings runs out in the future. Financial
advisors, college admissions counselors, and the school’s financial services
center may be able to help you explore your options for paying for tuition. |