Saving for retirement today can be a difficult financial thing to do. Between taking care of your family, saving for the kids’ college funds, taking care of your parents, and saving for your retirement, there can easily not be enough money to go around. This has resulted in many people forgetting about their retirement savings. Instead of stashing away money for their retirement, many adults prioritize their aging parents’ needs and their children’s education. While it’s a good thing to do for your family, you may end up putting you children in the same situation in the future—sandwiched between financial burdens.
Instead of investing on your children’s education and hopping they will take care of you in your old age, prioritize your retirement savings. Considering the pressure there is to take care of your aging parents and to provide for your children, this might seem impossible. However, if you consider your retirement savings to be as important as these other responsibilities, then the little money on your hands will be divided to go to each account. This will help ensure you take care of other responsibilities without neglecting your future.
When preparing for the kids’ college tuition fees, it’s easy to forget about the other costs that come with it. There are boarding fees, books, pocket money, and trips. If these additional costs are forgotten when saving up for college, it’s possible that you’ll get overwhelmed when your child goes to college. For students who get loans for their education, after graduating they have to live on as little as possible so they can pay back what they owe. This might mean they move back home. While this is good for them, it means more expenses for you. To avoid such surprises, factor in the extra college expenses and the time your child might come back home. This way you will not have to dig into your retirement fund.
The other thing that could keep you from saving as much as you want for your retirement is the possibility that your parents outlive their retirement plan. To come up with the perfect financial plan you need to know the nature of your parents’ retirement plan. This will enable you to know exactly how much you need to rise to take care of them.
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