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Avraham "AY"  Rappaport, CLTC

President, Financial Professional

 

Yaniv "Jay" Natanov

President, Financial Planner

 

Eli Rappaport

Vice President, Financial Planner

 

Shlomo Rosenstein

Financial Professional

 

Ozzie Marizan

Financial Planner

 

Joseph Greer

Office Administrator

 

Premier Financial

6395 Dobbin Road, Suite 102, Columbia, MD 21045

 

Phone:  240-309-6001

 

Email: joseph.greer@prudential.com

Website: premierfinancial1.com

May/June 2022

Balance Saving for College and Retirement

Balance Saving for College and Retirement

School's out. Summer's here. As parents, you need to think further ahead than summer camp. When it comes to choosing between saving for a child's college education or saving for retirement, which one should be the priority?


Sure, you want to minimize the amount your child will owe for student loans. But keep in mind that there are no loans for retirement if you come up short on your savings.


While there are no hard and fast rules about prioritizing your savings, the usual recommendation is to put aside money for retirement first. Your personal circumstances should be your guide. Here are several things to consider.


How Much Have You Saved?
If you already have significant retirement savings, you may be able to direct more money toward saving for your children’s college expenses. Be sure to run the numbers first, so you know you can afford to do this. However, make sure you’re still contributing enough to your company’s retirement plan to take advantage of employer matching funds.


Contribute to a 529 Plan
A 529 plan allows you to make after-tax contributions to an investment account on behalf of a designated beneficiary. One upside: Parents may be able to contribute less if others are chipping in. Grandparents, other relatives, and friends can contribute to the account. Withdrawals are tax free if they’re used to pay qualified education expenses, including tuition, room and board, fees, books, and supplies.


Open a Roth IRA
Although typically for retirement savings, a Roth IRA can do double duty as a college fund. You won’t pay a penalty on earnings you withdraw to pay qualified higher education expenses if the account has been open for five years or longer. Any funds remaining in the IRA will still be invested for your retirement.


Other Payment Options
There are a variety of ways to pay for college, including financial aid, loans, and work study. In addition, many organizations offer scholarships to students whose interests align with their mission.


Start early. Work with your school’s counselor throughout high school to learn how to qualify for aid.

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Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ, and its affiliates. Premier Financial is not affiliated with Prudential Financial. Premier Financial sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Premier is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Premier Financial and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Joseph Greer is employed by Eli Rappaport and not The Prudential Insurance Company of America or its subsidiaries.
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