College vs. Retirement

Don’t Derail Your Retirement with College Costs: Balancing Your Future and Your Child’s

Parents always dream of the best possible future for their kids, including top-notch education. But too often, parents forget a harsh truth: your own retirement plans could hit a major roadblock, or worse, get completely derailed. How can you invest in your kid’s success without sacrificing your own hard-earned future? We need to strive to safeguard both your child’s future and your own golden years, not only because nobody is more responsible for what you’re retirement will look like than you but also because it sets a good example of what managing household finances responsibly looks like.

Your Retirement: Non-Negotiable

Retirement isn’t a luxury; it’s a necessity. It may be the phase of life when you finally get to enjoy the fruits of your labor, travel, spend time with loved ones, and pursue hobbies. It also has the possibility of providing unfortunate news such as health setbacks, becoming a caregiver, layoffs and downsizing at a life stage when getting well paying jobs can become harder and harder. When retirement isn’t what you planned, that struggle is real. So, what can you do now to prepare?

1. Save Like Your Future Depends on It (Because It Does): The earlier you start saving for retirement, the more powerful compound interest becomes. Even small contributions can grow significantly over time. Don’t believe me, here’s an example: Suppose you start saving $100 per month for retirement at age 25, and you invest it in a diversified portfolio that earns an average annual return of 7%. By the time you reach age 65, you would have accumulated $378,721. However, if you wait until age 35 to start saving the same amount, you’d only have $168,887 by age 65. That’s a difference of $209,834, or more than half of your retirement nest egg. *This is a hypothetical example for illustration purposes only. Actual investor results will vary. The longer you wait, the more you lose. Don’t delay; start saving ASAP!
2. Don’t Assume the Best: Most people feel shockingly unprepared for retirement. Don’t be one of them – create a detailed plan.

The College Cost Conundrum (and How Not to Go Broke)

Let’s face it: college is ridiculously expensive and not getting any cheaper. Depending on in-state vs. out-of-state, public vs. private etc. four years can easily cost over $100,000-$200,000 so unless your kid is a genius with a full scholarship ride, they’ll likely need your help especially since many these days are taking 5-6 years. Here’s how to assist without obliterating your own finances:

1. Free Money Hunt: Scholarships and grants exist! Encourage your child to apply for as many as possible – that’s cash they never have to repay! These can significantly reduce the financial burden. Explore local, national, and merit-based options.
2. Smart Loans: If loans are necessary, choose wisely. Federal student loans often offer better terms than private loans. Understand the interest rates, repayment options, and potential impact on your finances. This can also help your kids build on their credit score.
3. Work + School = A Winning Combo: Not only does this allow students to earn money while gaining valuable experience it can be additional education in budgeting, allow for them to start retirement savings, and some employers will even offer tuition assistance that may even be forgivable after a certain amount of time. It’s a win-win situation.

Don’t Assume This Scenario Can’t Happen To You

Imagine this: You’ve sacrificed everything for your kid’s education, only to lose your job unexpectedly during a recession right around the time they graduate. Now your child struggles to find work, you may still have a mortgage to pay and you have no retirement safety net. It’s a nightmare scenario, but it happens. This is also why it’s important to remember that student loans exist……. retirement loans do not!

LaCour Wealth Management: Your Partner in Financial Balance

At LaCour Wealth Management, we understand the delicate balance between education costs and retirement planning. Our mission is to help prepare you for the curveballs life throws us. Here’s how we can help:

1. Retirement Savings Strategies: We focus on what YOU need to live life the way you want and be retirement optional as early as possible; this includes figuring out the right accounts, investments, and how much you need to save. Let’s not just survive retirement but make it the dream you’ve worked your whole career for!
2. Smart College Funding: We’ll explore college funding options that align with your financial situation. From 529 plans to tax-efficient strategies, we’ll guide you toward smart choices.
3. Protection Against the Unexpected: We’ll help build that emergency fund, find the right insurance, and make sure your family can handle whatever gets thrown your way.

The Future You and Your Kids Both Deserve

You absolutely don’t have (and it could even be irresponsible) to pick between giving your kids the best start in life and taking care of your own future. But it absolutely takes careful planning. That’s where we come in! Schedule a chat, and let’s build a financial game plan that makes everyone a winner – the relaxed (or at least financially secure!) retirement you’ve worked for and a bright, successful future for your kids. Let’s get this started! 🌟🌿🌞

www.lacourwealth.com

630.579.3804

This blog post was created with the help of Bing Chat Enterprise, an AI-powered chatbot developed by Microsoft. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of LaCour Wealth Management and not necessarily those of Raymond James. Raymond James is not affiliated with and does not endorse the opinions or services of Bing Chat Enterprise or Microsoft. Please note that this blog post is for informational purposes only and is not intended as investment advice. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Prior to making an investment decision, please consult with your financial advisor about your individual situation. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover education costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state..