How Do You Choose Between Retirement and Your 529?
Retire On Track LLC.
Sometimes, when you're planning for your retirement and for financing your child's education, it's difficult to know how to go about saving. Do you choose to invest in stock, bonds or mutual funds? More importantly, do you put your cash aside in an IRA or in a 529 account?
The answer to that question is not an easy one. There are no guarantees that your son or daughter is going to want to go to college. More importantly, aside from credit cards, there's no way to guarantee that your dreams for retirement, relaxing, traveling, spending time with your family or being prepared for circumstances unforeseen, will be funded if you don't save for your retirement.
So how do you decide?
Well, you can look at penalties for early withdrawals. Though there is a penalty for withdrawing funds from your retirement account before you reach a certain age, you decide how you will use them. With a 529, there is a 10% penalty on all withdrawals that are not made specifically for education.
Perhaps that gives you an answer.
More likely though, it doesn't. More likely, you're still caught between retirement and 529. Retirement; 529 plan. Retirement. 529. Which do you choose?
One suggestion that you could take is to further plan using our retirement calculator. Ray Martin of CBS News, and a noted financial analyst, suggested on the Saturday Early Show that our retirement calculator was a valuable tool.
It's a tool that can be used to evaluate your finances, whether or not you have begun an investment strategy. While the calculator is geared towards those who are investing in their retirement as a way to evaluate their investments, it can also be used to determine which investments are good for you, without having to invest and then wait to see how it works out.
In so doing, it eliminates much of your investment risk. Ultimately, that allows you to make a choice that you would not be able to make with a 529 savings plan , a choice that could drastically impact your savings for the future.
And there are other points that might affect your choices as well. To begin with, there are more alternatives for paying college tuition costs than a 529 savings account (which will be taken into consideration if your child needs to apply for additional financial aid); there are grants, loans and scholarships available.
In addition, other family members , such as your child's grandparents, can have a 529 account in your child's name. These same family members cannot help you to fund your retirement as easily.
Confusing as this decision between saving for retirement and beginning a 529 savings account for your child's education is, there's good news. Not only can you explore your retirement savings options with the free retirement calculator, but when you download and use it, you will also be contacted by a financial advisor. This expert will be able to help answer all of your questions and steer you towards the option that is better for your situation.
Why struggle to make sense of your savings on your own? Take advantage of the chance to see how your investments may affect your retirement savings and get answers to all of your important financial questions by downloading the retirement calculator for free, just click the blue button below
While no one but you can determine the best way for you to advise, it's a great idea to get some help along the way. Whether you choose to invest in your retirement or a 529 plan (or a combination of both), the retirement calculator is a valuable asset, a great tool to explore all of the possibilities. See for yourself: Click the blue button below to get started.