The massive student loan debt crisis in the United States is a constant headline and we can’t expect that the problem will one day just disappear. Millenials are taking on huge sums of money after graduation that most cannot afford to pay back and their parents are feeling like they should have done more to help.
If you are a parent, of course you want to see your children get a college education and so you do what it takes to make sure that they can go to the best school that they get accepted to. But what happens when you reach the point where your contributions are leaving your retirement accounts a little lighter than they should be. That’s a hard pill to swallow.
In Matthew Stern’s recent article on the subject he says, “The parents of college students are paying for skyrocketing tuitions with money that would otherwise go to their own retirements.” This is a truly unfortunate circumstance for parents today who have worked too hard for too long to save for their retirement. Using your 401K or Roth IRA to pay for college is absurd. Those accounts are for retirement. When you take money out of them to pay for college, you are draining your wealth and ultimately delaying your….RETIREMENT!
Just look at the number of concerns that Stern presents in the full article here: http://www.benefitspro.com/2015/03/05/paying-for-the-kids-college-with-retirement-dollar
If you are still scratching your head like “what choice do I have?” then you need to make sure you are fully aware of:
1) How to get the most aid for college or