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?
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.
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.
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.
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.
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 :(
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.
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 !
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.
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.