Do you have a question about your financial affairs? Financial planning consultant, Robert S. Pennartz, CFP takes calls at 1-302-654-5556, extension 138 or 1-800-366-0632, extension 138. A selection of these questions and Pennartz's responses are published in this column. Anonymity is assured.Q. I have 2 children in high school. I'm concerned about college costs for them. I can only save so much money. My question is should I save money for their college education, or should I save for my own retirement? I can't fully do both.
A. Good question. Both college education and retirement are important issues to save and prepare for, but which one takes precedence? What's more important?
No one offers you grants, scholarships, or federally guaranteed loans for your retirement. Once you stop work, the money that you have is it, and that has to last for the rest of your life.
You should take full advantage of your retirement plan at work. You'll get special tax advantages and your employer may even make matching contributions.
Assets in retirement accounts will not adversely affect your children's applications for federal financial aid. Private colleges, however, may take it into consideration for grants, scholarships, etc. coming directly from the school.
You may have to make some compromises to pay for both college and retirement. You might have to work a few more years until you retire, or your children may have to borrow more money than you want. A little flexibility can make it possible to reach both goals.
I would focus on your retirement first, then college.
o Robert S. Pennartz is a Certified Financial Planner Practitioner at the Financial House, a Registered Investment Advisor, in Centreville, Del. He lives in Pocopson Township with his wife and children. He is a registered representative offering securities through Jefferson Pilot Securities Corporation, Member SIPC. Jefferson Pilot Securities Corporation and its representatives do not offer tax or legal advice. You should consult your individual tax or legal professional regarding your individual circumstances.