Your Financial Future

Multitasking: Preparing for Both
Retirement and College

There are several steps you might consider to help tackle this
balancing act.

Prioritize your goals.

Planning for the cost of your children's future higher education while investing for your own retirement can seem daunting. A first step may be to sit down and establish your goals and decide how you'll get there. Take into account the amount of time you have until you'll need the money. And, remember the often-cited statement, "There are no scholarships for retirement."

Invest now — and regularly.

Once you know how much you can earmark for your goals, determine a dollar amount or percentage to allocate to each. For example, you might consider setting up automatic transfers to a 529 college savings plan in addition to contributing to your retirement account.1

Develop a budget.

As your income rises over the course of your career, it's easy to slip into a pattern of improving your lifestyle instead of contributing to essential expenses. One way to avoid this pitfall is to develop a budget that adjusts your retirement and college contributions as your income increases.

Monitor your progress.

Ultimately, balancing the retirement-college funding challenge requires a long-term combination of setting goals, budgeting, and reviewing your progress. Life is not static, and your long-term plan shouldn't be either. Consider new issues as they arise and adjust your plan accordingly.

1Investing in 529 plans involves risk, including loss of principal. Before you invest in a 529 plan, request the plan's official statement and read it carefully. The official statement contains more complete information, including investment objectives, charges, expenses, and the risks of investing in a 529 plan, which you should carefully consider before investing. You should also consider whether your home state or your beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's 529 plan. Section 529 plans are not guaranteed by any state or federal agency. By investing in a 529 plan outside of the state in which you pay taxes, you may lose the tax benefits offered by that state's plan. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary.