College Fund or Retirement

Updated on December 02, 2012
J.G. asks from Chicago, IL
20 answers

Hubby is fortunate to get a nice bonus most years. This year, I would like to take a portion of it and max out IRA limits --we already max out his 401k, but since I don't work, we really need to save more! It got me wondering, however, if we should be putting the money in the kids' college accounts. We don't put much in them (only $120 a month each, and with a third on the way, it may be even less)..... I honestly think college is the next bubble to burst, and by the time they go to school, college will be nothing like it is today, so we aren't too worried about it.... They are also EU citizens, so we could just ship them off to Europe for free schooling.

With that said, what do you do with your extra money? College or retirement? Anyone use Roth contributions to pay for college?

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So What Happened?

Thanks everyone!

Gamma G. I'm planning on homeschooling, so I don't plan on going back into the workforce anytime soon. My own mom used the money from her job to pay for college for us kids. In fact, she retired when I graduated (she was 58 at the time).

I think I will look more into using Roth's to pay for college. I always pay us first, but I do worry about not putting enough aside for the kids. I don't want them to have the burden of a large student loan. I'm still paying mine off! (we haven't paid it off because the interest rate is only 2.5, so it's cheap money with a deduction!)

We look to be mostly on track for retirement, so I do think a Roth might be the way to go since the money can be used for retirement or college.

Featured Answers



answers from El Paso on

I say retirement as well. There are SO MANY different grants and scholarships available out there, you just have to look for them.

1 mom found this helpful

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answers from Fargo on

Retirement..... kids can get loans for college.....there are no retirement loans.

4 moms found this helpful


answers from Seattle on

Not a lot of grants/scholarships/loans for retirement.

4 moms found this helpful


answers from San Francisco on

Yup, I think it's the next bubble too. Ship 'em off to Europe, if it will be free. What a great experience that will be for them.

Even Suze Orman says you should choose your retirement over your kids' college fund.

4 moms found this helpful


answers from Detroit on

I vote for beefing up your retirement funds. There are lots of ways to pay for college besides just saving for it. Your retirement is all on you.

2 moms found this helpful


answers from New York on

RETIREMENT. Although I think it's important for parents to help their kids with education costs, ultimately it's the child's responsibility. Your child can get loans, grants, scholarships, or may not even choose to go to college.

2 moms found this helpful


answers from Philadelphia on

Retirement! I agree with you... Higher education pricing is going to have to change drastically!

2 moms found this helpful


answers from Missoula on

Retirement. Your kids will have options when it comes to paying for college. Retirement is totally up to you.

2 moms found this helpful


answers from Kansas City on

retirement. there is nothing wrong with saving for college too, BUT your kids can WORK to put themselves through college. there's nothing wrong with that. college isn't a right, it's a privilege. retirement is inevitable. big difference.

2 moms found this helpful


answers from Columbia on

If you already have a hefty emergency fund, and your interest bearing debts and credit cards are paid off, you should put the extra into retirement.

2 moms found this helpful


answers from Washington DC on

Retirement. The kids can take loans and find work and other ways to get through college, but your retirement is your plan for your own post-work life. Pay yourself first.

2 moms found this helpful


answers from Washington DC on

We do retiement and don't currently have college accounts for or kids. I have loans and I don't see any reason they can't have some loans also. Of course we will do what we can to help, but it is what it is.

1 mom found this helpful


answers from Oklahoma City on

Almost every friend I have that has been a SAHM went back to work when the kids started school full day so they could put the money aside for college and missions. They planned on this from the time they were at college so that when they did have kids they would have a career to fall back on. Some did go to college to get degrees after the kids were in school, like one friend, she got her RN so she could work more daytime hours instead of a variety of them at the hospital. Another friend went and got her Master's in Education so she could be a Principle instead of just being in the classroom all the time.

Many women go back to work when the kids are in school so they can have that abundant cushion to fall back on when that day comes and the kids get accepted into a great college that is thousands of miles away. The housing and food plans are over a thousand a month. That money that can be saved from the mom's work and there is not any pressure on their retirement or their personal future.

It is also handy in case they have some unexpected bills come up too.

1 mom found this helpful


answers from Pittsburgh on

Ideally, both.
We are older parents and have been advised that the retirement fund should come first. We do have a 529 plan for him, as well.
Nothing wrong with mostly working your way through school, like I did, as I did not have a college fund..I worked, got some aid, scholarships, and took minimal loans.

1 mom found this helpful


answers from Chicago on

Retirement: I totally agree with you that higher education is a bubble.

1 mom found this helpful


answers from New York on

I think it's great that you've already got college savings plans for your kids. Since you're expecting a third baby, I'm guessing that your kids are young and college is a long way away. If that is the case, I'd roll the money into the retirement account. If it was me, I'd put the money into college savings, but I have a kid leaving for college next August.
I've got to giggle at the parents who think their kids can work or borrow their way through college. Unless you're talking about a community or state college and you live for free at your parents' house, this isn't going to happen. Even for a state school, it'll cost over $80,000 for my daughter to attend for four years. There's no after classes pizza joint job that pays that well. Add $150K to that for her veterinary degree, and no one needs to come out of school almost $250K in debt.

1 mom found this helpful


answers from New London on

I rec that you and your husband sit down w/ a financial planner. A good financial planner can map out how much you will have for retirement when it's time---and--- add in the cost of inflation.

I would continue to put the 120.00 a month away for the kids.

It's hard to tell what the cost of college will be in the future. I would still save for them and give what you can. I have plenty of friends w/ kids who have had to take loans out. It's the norm today !

1 mom found this helpful


answers from Dallas on

Actually both are very critical.

We believe, as parents, it's our obligation to get our daughter out of college debt free. Yep, I know I'm in the minority but I brought her into this world, I'm raising a darn good kid who will start college in the fall of 2013 and we've been saving for her college since before she was born AND our retirement since WAY before she was born.

We already have her set up with her own 401k through our company as well.

We believe in personal responsibility, no debt, delayed gratification and of course diversified investments.

So... If I had an unexpected windfall right now..... College fund. We've already maxed out everything with retirement this year and my daughter is looking at $60,000/ yr minimum for each year of college. She's primarilaly funded 100% and if something is leftover due to scholarships, etc... It's for her children.

I'd never consider throwing my child out into the what ifs and expect her to fund her college. That's my duty as a parent. ( but like I said... We are a minority on this topic)

We have some very different views of raising a respectable child who appreciates personal responsibility. Our retirement is already funded quite well, we just add to that with extras along the way. And... Yes our daughter does appreciate what she's got and opportunities which have come along the way. She's much like us.... Hard working, strong work ethic, very self driven, motivated and disciplined.

1 mom found this helpful


answers from Los Angeles on

I say retirement first.
It's very scary to be old & have serious health issues w/o any money.
No where to go, no one to help etc.

Plan for your retirement then put some money towards a college fund for your kids.

A couple of other reasons? Some kids end up not going to college. Not our hope, I know, but.....
Also, they can get grants, student loans.
If we save for our retirement, we won't be a burden to them.



answers from Chicago on

retirement. your kids can go to college and foot the bill. turns out they appreciate what they pay for a whole lot more lol. save what you can but don't short your retirement money. I am stuck right now in the helping my mom and still taking care of my own children. we will be broke by the time it is our turn to retire :(

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