06/04/2025
Paying for a child’s college education is a goal for many parents, along with other financial goals like saving for retirement and buying a home. When there are so many priorities, it’s hard to know what to tackle first. Here are some things to consider as you make that decision.
Time is the key when saving for retirement: Take this example of Joe vs. Katy.
Katy made saving for retirement a priority. She contributed $4,000 annually to a tax-deferred account earning 8 percent, from age 25-35. She then made no additional contributions, and by age 65, had accumulated over $680,000.
Joe began saving later. He contributed the same $4,000 annually to a tax-deferred account earning 8% but contributed from age 35 all the way to age 65. At that point, he had accumulated just over $532,000.
The difference is time. Katy had the benefit of more years of compounding.
Saving for college can be more challenging because there is less time to save.
People who reach their financial goals rarely do it alone. A financial advisor can help put together a plan for improving your financial wellness and balancing your future goals.
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