If your Edward Jones branch office is temporarily closed due to the wildfires in California and you need assistance, please call our Client Relations department at 1-800-511-5768 (Monday-Friday, 7 a.m. – 7 p.m. CT) or view additional contact options.
Saving for retirement? Saving for college? This doesn't have to be an either/or proposition. Almost everyone juggles more than one savings or investing goal. Our goal is to help you create a strategy that covers all of your bases.
It can be intimidating to think about how much you should save for both college and retirement—but it doesn't have to be. Take it one step at a time. Your financial advisor can help you understand how the choices you make today about college savings may have an impact on your retirement.
When you think about it, money you invest for college and retirement comes from the same pool. So, how to strike the right balance? It's all about priorities and trade-offs.
Consider the following example:
Jim and Mary Thompson are 32 and plan to save $800 per month for retirement based on their goals. They also want to start a college fund for their newborn, Lillian. Based on these goals, they developed the following strategy with the help of their financial advisor:
Retirement Goal: Retire at age 65 with $50,000 in annual income from the portfolio.
Required Monthly Savings: $800
Education Goal: Provide $115,000 toward Lillian's education.
Required Monthly Savings: $300
To cover both goals, the Thompsons would need to save $1,100 per month. However, they determine they can save only $900 per month, so they're discussing their options and trade-offs.
In our example, the Thompsons had to make some trade-offs, like retiring a little bit later and paying most, but not all, of college costs. You may or may not need to do the same. Your answer lies with how you prioritize your goals.
Importantly, we don't recommend putting off saving for retirement because you are putting money away for college. This could put your retirement goal in detention. Time is a very valuable asset, so don’t delay saving for one goal over the other – view them together.
At Edward Jones, we understand your life is a series of overlapping decisions. Your financial advisor will ask questions and really listen to understand your situation and develop a strategy to address what's important to you. Call your financial advisor today to get started saving for college and retirement.