With the cost of college tuition rising and your golden years looming, you may be faced with a dilemma – should you save for your child’s college fund or your own retirement? Like many parents, you may think it’s better to put your child’s future ahead of your own and save for college. But saving for retirement should be your first priority. After all, even though you have a defined benefit pension, there are no loans or grants to pay for any shortfall between your pension and your retirement expenses.
Finding a Balance
When it comes to saving, you’d like to have enough money for all your future expenses. But with uncertainty in the state budget, you may not have as much money to save as you would like.
- Participate in your 403(b) or 457 plan. Try to increase your contributions each year, or whenever you get a raise. Small increments in your contributions can make a big difference over time. For example, see how increasing your 403(b) or 457 plan contribution by just $25 a month could grow over the years, assuming an average annual return of 6%.