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Save For Yourself, Then Your Kids

We’ve often written about the dire state of retirement savings.

Almost everyone needs to be shoveling more money into a 401(k) plan or Individual Retirement Account.

Almost no one will be able to build the million-dollar nest eggs online retirement calculators say you’ll need to have a secure and comfortable life after work.

But that’s no reason to give up and save nothing at all.

Some savings is always better than no savings.

And you definitely don’t want to think, “I’ll never be able to save enough for retirement, so I’ll save for my kids’ education instead.”

Aside from getting rid of any high interest rate debt your number one savings priority should be your own retirement.

It should take priority over saving money away to put your kids through college, for this simple reason: You can borrow for college, but you can’t borrow for retirement.

Consider this scenario: You’ve put all your money into your kids’ education, and when you turn 65 (or 62.3, which is the actual average retirement age because no everyone retires voluntarily), you have nothing for yourself.

Who is that burden going to fall on?

Your kids.

So here are two important principles to remember:

  • Every dollar you save for retirement will be a dollar you’ll be grateful to have when you get there.
  • Save for yourself first and your kids second.

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