The financial demands placed on us at this time in our lives can be enormous. Many of us not
only have children to care for but might also have parents or others who will rely on us financially.
It is critical that we take care of ourselves first before we can take care of others. We all need to have a well
thought out and aggressive plan to save as much money as possible for our later years. How
does retirement fit into the college funding puzzle?
Probably the BIGGEST CHALLENGE we all face is outliving our income, or simply not having enough to live on in retirement.
We are a nation of spenders. We save to spend, rather than save to save as we should.
{A recent study shows that a typical baby boomer has saved only 12% of what they believe
they will need to have a comfortable retirement!} {Another study tells us that the average couple at age 65 can
be expected to spend $200,000 on healthcare alone in their retirement years!} Are you ready for this?
With a shortage of reliable information and an abundance of
misinformation on how this process works, with the scarce resources available to help us to successfully manage
this problem, we usually end up on a path to financial chaos by trying to go it alone. Using a 'band-aid'
approach is very common; we have no idea how much it will cost in the first place and when the bill finally arrives
we borrow money from the quickest source to pay for it and then borrow some more in the next year to do the same and
so on. The result is that we go further and further into debt until the debt load becomes unmanageable
and we can no longer continue. It should be obvious that knowing how to properly finance
a college education is critical with regard to your overall lifetime financial picture.
If we
have no plan and we do a poor job of borrowing as a way to pay for our costs, we put ourselves at financial risk in several
ways. There is the probability that we will have to compromise our retirement savings which, as discussed
above, we simply cannot afford to do. Also there is the continued erosion of our standard of living caused by the loss
of disposable income from our savings and cash flow. If we use up whatever liquid assets we might have such as
savings, bank CDs, investments, etc. before we do need to borrow, we then expose ourselves to significant financial
risk in the event of a sudden large unanticipated expense such as a hospital bill, a critical illness, a disability or unemployment,
as there is no emergency fund available.
from other page:
If we think of retirement as being financially independent
via our own sources of income from our own assets, are we doing today what we should be doing in order to be able
to realize the security and lifestyle we want in our later years? With
advances in medical technology and many catastrophic illnesses now controllable, with our ever-increasing life expectancy,
it is critical that we do everything we can to avoid the danger of outliving our income. With longevity comes the
necessity and high cost of long-term care which could wreak financial havoc. So, we should work
aggressively at saving and creating assets which will provide security and allow us to realize our goals and dreams in
our later years. You can see
then how not having a solid funding plan in place to get our children their education will effect our lifestyle, put us at
financial risk & most likely compromise our retirement and financial future. The question is simple, the answer
is obvious: Is it wise to solve this problem by taking on tens of thousands of dollars in new debt???
NEXT: Will I Get Financial Aid?
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