Gen X Parents Juggling Retirement and College Funds Like Rockstar Multitaskers!

Generation X Balancing Retirement and College Savings

If you’re a parent, you know the struggle of saving for retirement while also covering your children’s college expenses. It’s like trying to juggle a flaming torch while riding a unicycle on a tightrope. Talk about a precarious balancing act!

But fear not, brave parents! We’ve got some tips to guide you through this financial tightrope walk.

Let’s start with Generation X. They’re the parents who are currently in their forties and fifties, trying to pay for college while also ensuring their retirement accounts are on track. And boy, do they face some hurdles! Not only do they have the highest student loan balances of all generations, but they also had to navigate the transition from company-funded pensions to 401(k) plans. And let’s not forget about taking care of aging parents. It’s a financial juggling act of epic proportions!

Now, here’s the secret to success: prioritize retirement savings. I know, I know, you want to lighten the load for your kids, but your retirement deserves some love too. Take it from Alissa Krasner Maizes, a 55-year-old attorney and registered investment adviser, who made sure to save for retirement while preparing to send her sons to college. She and her husband funded their Roth IRAs, traditional IRAs, workplace 401(k) accounts, and even set up brokerage accounts for retirement. Talk about going all in!

But hey, if you’re feeling behind on saving, don’t fret. Mari Adam, a certified financial planner, says you can catch up. The most powerful thing on your side is time, even if you’re a Gen Xer. You’ve still got 10 to 20 years to save, so let’s make the most of it!

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Adam suggests fully funding your IRAs if you can. The standard maximum IRA contribution for 2023 is $6,500, and if you’re 50 or older, you can make catch-up contributions of up to $1,000, for a total of $7,500. And don’t forget about your workplace retirement plan. Save enough to capture any employer match because, hey, free money is always a good thing!

If you’re looking to boost your retirement savings, track your cash flow and see where you can cut back. Maybe hold off on buying that shiny new car or upgrading your appliances. And once your nest is empty, consider downsizing your home and redirecting those saved housing expenses towards retirement. Every penny counts!

Now, let’s talk about college savings. Once your retirement plan is on track (pun intended), it’s time to focus on saving for college. One great option is a 529 college-savings plan. It offers tax-free investment growth and no taxes on withdrawals for qualified higher-education expenses. It’s like a magical pot of gold at the end of the college rainbow!

Nearly all states offer a 529 plan, and some even provide tax deductions or credits. But don’t be afraid to check out plans from other states too. You might find lower fees or better investment options that work in your favor. Saving for College has all the comparisons you need!

If you want to take a different approach, there’s always a taxable brokerage account. While it doesn’t offer the same tax benefits as a 529 plan, you can withdraw from it for any reason without penalty. And if your retirement savings are solid, you might consider using funds from your Roth IRA to help pay for college. Just remember, you can withdraw contributions anytime without paying taxes or penalties. Score!

And last but not least, involve your kids in the college planning process. Encourage them to take Advanced Placement courses in high school to earn college credits and save some moolah. Jobs and scholarships are also fantastic ways for them to contribute. And hey, let’s be realistic about pricey colleges. If the debt outweighs the benefits, it may be worth considering more affordable options. Practicality can be a beautiful thing!

Now, I know it’s tempting to take on debt for your kids’ education, but trust us, it’s not ideal. Leaving yourself with retirement debt is like trying to swim with an anchor tied to your leg. Not a pleasant experience, huh?

So, dear parents, as you navigate the college and retirement juggling act, remember to prioritize your future while providing for your children. And keep in mind that financial success is within your reach, even if you’re walking a financial tightrope!

Read More: – Can Gen Xers Afford to Retire? – 529 Plans Get a Boost With Tax-Free Rollovers to Roth IRAs – Three Reasons You Need to Use a 529 Plan (and Two Reasons You Don’t) – How to Align Strategies for Student Loans and Retirement

Now go forth, brave parents, and conquer the financial tightrope like the superheroes you are!

• College
• family savings
• Personal finance
• retirement
• retirement plans
• student loans