What To Save For First: Retirement, College or Taking Care of Mom
By: Kathleen Lange
My grandmother used to affectionately call me “the rose between the thorns”, thorns being my older and younger siblings. Now, society is calling me a sandwich. Not for my birth order, unfortunately, but as I’ve come to learn, for being one of the growing number of Americansopens in a new window who have to worry about taking care of their growing children and aging parents. Not to mention, worry about growing old myself and funding my retirement. As if my newly formed eye wrinkles weren’t already a gentle reminder of getting old.
But who do I save for first? Clearly I need to think of my own children and invest in their future, right? But wait, my Mom didn’t raise me only to be left out in the cold. It’s slowly becoming a game of, “if you were on an island who would you vote off first”. This is what I’ve surmised:
Put Your Own Oxygen Mask On First
There is a compelling reason a flight attendant instructs parents to put on their oxygen masks before assisting their small children: You cannot effectively take care of others until you yourself are taken care of. Although this might feel completely unnatural, save for your retirement first. There are easy-to-implement solutions to common retirement challenges, including efficient investment growth opportunities and estimating the cost of retirement in cities you want to live.
It’s also worth looking into the benefits offered by your employer – like retirement matching, life insuranceopens in a new window and financial planning – to help you save for retirement even faster.
Who Comes Next: Kids Or Parents?
Ultimately, while everyone should be saving for retirement first, the next decision is a highly personal one and depends on your unique circumstances. Your priorities will be determined by how far both your kids and parents are from the age where they’ll need your financial help most.
But the good news is that there are ways to grow and support your savings for both your kids’ college and your parents’ care.
Getting Creative About College Savings
There are many ways to fund your child’s college education. Whether you have $5,000 or $50 earmarked for college savings, it’s worth taking time to plan now for an expense that’s knocking at the door. Roth and 529 plans offer tax-advantaged savings, while student aid can be a great low-interest rate choice for those who need their cash on hand to remain liquid.
Additionally, alternatives like government assistance may be more readily available than you think, and you may even want to consider getting creative about how your kids can contribute to their college expenses.
No matter what you decide include them in the planning. It will help them understand what you can and cannot pay for, or potentially help them to understand the full scope of what student loans may mean to them someday.
Employee Benefits Aren’t Just For You
If your parents are struggling with navigating their healthcare options, or if assisted living is the next best step but beyond the budget, it’s a great use of your time to get involved by ensuring they’re receiving all their due benefits. And there are more benefits available than the obvious ones, like Social Security and Medicare. Part of your employer benefit package may include resources that help your aging parent navigate medical bills or prescription costs.
Even more, did you know that every U.S. Senator has a staff specialist on elder affairs, programs and services? These advocates can help you ensure that your parents are getting all of the help that’s available to them in their state. For more resources on elder benefits and how to apply for them, check out this handy listopens in a new window. In addition to easing the financial burden on you, these benefits can result in a higher quality of life for both you and your parents in their later years.
The Bottom Line
As challenging as it is juggling my own needs, let alone those of others, I wouldn’t trade that challenge for the love and support of my family (cue Aretha Franklins We Are Family). By taking care of yourself first, then taking time to explore options for college funding and benefits available to your parents, you might find that your goals are more comfortably within your reach than you thought. And that’s an outcome that you, your kids and your parents can benefit from.
This article is presented for informational purposes only. It should not be considered advice for which you should contact your qualified professional before making financial decisions.
Presented by TP Mechanical | Provided by Prudential
