Retirement or Funding Education: which comes first?

That’s one of the toughest questions most parents will ever face. Basically, you’re asking yourself, “What’s more important? A secure retirement or my children’s future?” Most financial experts recommend making the decision based on reason rather than emotion.

Let’s face it, when you’re retired you’re not earning a salary and you may not have much pension income. So if you want to continue providing for yourself and your partner as you age, it’s essential to start saving for your retirement as soon as possible. Therefore, saving for retirement is a necessity.

While education is extremely important, there are other ways for your kids to pay for it rather than relying on their parents. They can try scholarships, grants, part-time jobs, etc. (see page 1). Therefore, funding your kids’ education is a bonus, not a necessity.

Some parents impoverish themselves by funneling all their savings into education and even dipping into retirement plans. What you should do instead is make sure you’re setting aside 15% of your income for retirement. Then allocate anything above that into education savings plans for your kids.

Remember, only by taking care of yourself first will you be able to take care of those you love. If you need help deciding how to allocate limited resources, we can introduce you to one of our local financial planning partners.

Mark Kupina | Kupina Mortgage Team | 905.730.4782 | mark@kmortgage.ca