The question of whether to save for retirement or your children’s education is

complicted by many factors. There is no straightforward answer.

Having Children Later in Life

Today, people are also having children later in life, so the gap between college for
children and retirement is narrowing. Years ago people got married out of college
and had kids in their mid-20s. By the time they hit 45 or so, they would have kids
entering college and by the time they were about 50, their kids would be graduated.
Then they had 15 years to think about their own retirement, if they planned on
retiring at age 65.

For many people today, this scenario happens 10 years later. You might be hitting
your late 50s or early 60s by the time your children are entering or finishing college,
possibly leaving you with as little as five years to ramp up for retirement. (For more,
see: Paying for College: Why Parents Should Prioritize Retirement.)

So, which is it - saving for retirement or education for the kids? Is it possible to do
both? There’s no concrete answer, but one suggestion is to focus on a balance. Both
are important priorities and pushing either off makes the chance of having enough
saved for either more challenging.

Start Early: The Power of

Compounding
One idea is to start saving for retirement as soon as you can. The earlier you start
the more time the money will grow and compound. Consider the power of
compounding over time. When you get out of college and get your first job you may
not have a spouse or even be thinking about kids but you probably know you want to
retire someday. If your first job does not offer a 401(k) or other retirement plan open
an IRA or Roth IRA and make your own contributions. Even if you only do this for a
few years and then stop when the family comes around, the power of compounding
will be wind at your back.

We put together the following chart to show you the difference between starting to
save for retirement at age 22 versus age 37.

Finding a Balance
What happens once you have the family? Continue to save for retirement but
redirect some of that savings towards a 529 or custodial account so you can focus
on both. While it may sound daunting, the earlier you start the better. Don’t feel like
you must have college saved for before your child even begins college. It’s more
realistic to have some percentage saved. And if you want to pay the remainder of it
for your child, pay the difference out of your earnings. Most people’s prime earning
years are in their late 40s to late 50s, the same time your children might be in
college. When it comes to saving, the earlier you start, the better. (For more,
see: Why Save for Retirement In Your 20s?)

Disclosure: Lang/Ciosek Team is registered with HighTower Securities, LLC,

member FINRA and SIPC, and with HighTower Advisors, LLC, a registered
investment advisor with the SEC. Securities are offered through HighTower
Securities, LLC; advisory services are offered through HighTower Advisors, LLC.
This is not an offer to buy or sell securities. No investment process is free of risk, and
there is no guarantee that the investment process or the investment opportunities
referenced herein will be profitable. Past performance is not indicative of current or
future performance and is not a guarantee. The investment opportunities referenced
herein may not be suitable for all investors. All data and information reference herein
are from sources believed to be reliable. Any opinions, news, research, analyses,
prices, or other information contained in this research is provided as general market
commentary, it does not constitute investment advice. The team and HighTower
shall not in any way be liable for claims, and make no expressed or implied
representations or warranties as to the accuracy or completeness of the data and
other information, or for statements or errors contained in or omissions from the
obtained data and information referenced herein. The data and information are
provided as of the date referenced. Such data and information are subject to change
without notice. This document was created for informational purposes only; the
opinions expressed are solely those of the team and do not represent those of
HighTower Advisors, LLC, or any of its affiliates.