According to a recent article in the Wall Street Journal, many Baby Boomers are no longer worried about when they will be able to retire, but if they will be able to retire at all. In many cases the reason for this worry stems not so much from any kind of selfish inability to save, but from a tendency to be too generous.
In addition to a growing trend (hinted at in the WSJ article above) of Baby Boomers tapping their own retirement funds to help pay for the care of their elderly parents, this article in USA Today warns of the all-too-common danger of Boomers shorting their own retirements to pay for their children’s college educations.
“People are willing to go to extreme measures because they value a college education so highly… Among parents who are planning for their children’s college, 24% say that they tap their retirement accounts. And that doesn’t reflect people who reduce or halt retirement contributions [to make tuition payments.]”
One thing that both of these articles agree on is that when it comes to saving money, Boomers need to put their own needs first. While the immediate financial needs of an elderly parent or college-bound child may feel more pressing, it’s a very bad idea to short your own retirement account (and your future) to cover their costs. If you have an elderly parent in need, before you dip into your own savings contact a good elder law attorney who can help you review your (and your parent’s) options, and help navigate the VA Benefits or Medicaid system if applicable.
As far as college tuition goes, by neglecting your own retirement to pay for your children’s college education you may simply be perpetuating a dangerous cycle, putting your children in the position of having to pay for your expenses when your savings runs out in the future. Financial advisors, college admissions counselors, and the school’s financial services center may be able to help you explore your options for paying for tuition.