Graduation season is behind us. Those beaming faces seated in front of podiums eagerly awaiting their graduation certificate or diploma from middle or high school are now probably lounging by the pool waiting to begin the next phase of their school “career.”
For parents of middle-schoolers entering high school, the thought of college can be as oppressive as the sweltering summer heat. Not only is your baby growing up there’s a looming tuition bill on the horizon. For parents of high school graduates entering college in the fall, you’re already facing the reality that tuition bills are due in late July and August.
As I like to say to clients and prospects, it’s never too early … or too late to start planning on how to pay for college. And because every dollar paid for college tuition and fees is potentially one less dollar that can be used for your retirement savings, both college and retirement planning are inextricably linked.
There’s more to college funding than college savings.
Did you know that in Massachusetts, New Hampshire and the New England area generally, the average total student budget for tuition, fees, room, board, and supplies is close to $21,000 each year? Tuition alone averages about $13,400 per year nationally for an in-state student entering a public university. With inflation that’s more than $80,000 by the time you send ONLY ONE child to school – to an in-state school! For out-of-state or private schools the price tag is even higher.
With the average four-year cost of college EXCEEDING $100,000 for one child, like most parents, you’re probably very concerned about paying for college. At the same time, you are even more concerned about saving for your retirement. There’s the dilemma:
- Will you need to sacrifice your retirement in order to educate your children?
- How can you pay for college without going broke or busting your retirement dreams?
Most parents think that “college planning” means “saving for college” – that they are identical. They think that it’s all about how much you stuff into a 529 Plan, if they even know what that is in the first place. They see the two goals of saving for retirement and planning for college as mutually exclusive and so they do very little, if any, college planning.
Most parents – regardless of income – don’t plan for college until it becomes URGENT. This lack of planning actually increases their out-of-pocket college costs and may needlessly divert thousands of dollars from their retirement savings.
The fact is that college planning is NOT just “saving for college.” It also includes college planning and funding strategies that can help parents save ON their college costs – not just FOR college costs.
The goal of this series is to provide some tips to think about that may really help you lower the cost of college without busting your retirement nest egg.
