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I WAS 45 YEARS OLD in 1988. That year, my oldest child started college and, the next year, my second son. Two years later, it was my daughter’s turn. The year after, my youngest went off to college. I had at least one child in college for 10 years in a row.
I bet you think this is a story of college loans and other debt. Nope, it’s about retirement planning. After going into major debt and using all my assets, other than my 401(k), I had several years to recover. Fortunately, I was also eligible for a pension—and I eventually retired at age 67.
In 2018, things are very different. Today, all my children have kids in elementary school—at an age when my children were going off to college. My oldest son, now age 48, will be nearly 60 when his oldest child starts college. The second son, age 47, will be 63 when his youngest graduates high school. The situation is similar for my other children and, it seems, for many in their generation.
See where I’m going with this? Saving for both retirement and college has always been a challenge. But there used to be a gap between the end of one and the start of the next. That gap is disappearing.
The age at which women have their first child has been rising for decades. In 2016, the Center for Disease Control reported that, for the first time, women in their early 30s were having more children than those in their late 20s.
None of my children has a pension. My advice to them is save for retirement first. To help with college costs, my wife and I contribute to our grandchildren’s 529 plans in lieu of birthday and other gifts.
In my view, the long-term solution to college costs is rethinking the entire post-secondary education process, including the number of years spent in college and better defining which jobs truly require a four-year bachelor’s degree. But until that happens, most Americans have no easy funding solution. Still, here are nine tips:
Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include Ten Commandments, Running on Empty, Taking Your Lumps and Pain Postponed. Follow Dick on Twitter @QuinnsComments.
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The advice to ignore college marketing and get an associates degree at a community college is doubly smart. For many students, it’s a chance to make cheap mistakes at an age when a lot of life lessons happen. And in the end your diploma has the name of the school granting your B.A. or B.S. degree.
My wife’s and my estate planning gives most of our assets to our grandkids with the sole purpose of starting / enlarging their retirement accounts. Our children should be almost at retirement age when we die. It is too late to help them. There are ways to fund college such as joining the military. Starting off in a community college helps keep cost low. The one thing I didn’t see on your list was to have affordable and reasonable weddings. Spending $20k, $30k, $50k on weddings is insane unless you have that money after you fund your retirement and are proper paying down your other debt. Don’t go into debt to fund your kids dreams or kids and grandkids college. You should retire not work yourself to death.
Good article. Food for thought though: for late-starting parents, they may already have a good start on retirement by the time they have kids late in life. That’s what ended up happening to me and my wife. Now that we’re further on in our careers, saving for both retirement and college is not a problem (thank God).