Parents face a tough choice when it comes to savings priorities: Focus on saving for retirement, or put away money for your children's tuition?
I’m often asked if you should pay for your kid’s college tuition first or save for retirement first?
The answer is you should do both at the same time. Regarding paying for your child’s college tuition, check out The Alemian File episode 10. You will learn how to get someone else to pay for your kid’s college tuition. More specifically, you will learn how to position your child to get merit award money. Merit award money is money that comes straight from the colleges, and it's money that you don't have to pay back. This one thing can mean there will be tens of thousands or even hundreds of thousands of dollars more for you when you retire. It's not just the money that you saved from your kid's college tuition that you'll have, it's the interest you'll earn on that money. You work very hard for your money; I'm showing you how to hang on to your money so your money can work very hard for you.
Lately I’ve run into a number of physicians who have just finished paying for their kid’s college education out of their own pocket. What I’ve found is paying for your kid’s college education out of your own pocket is a huge retirement wake-up call because college tuition for your kids very quickly depletes whatever retirement savings you may have. What’s worse is many physicians raid their 401(k) or 403(b) plans to pay for their kid’s college education. To add insult to injury, they then have to pay tax on that money and a 10% penalty to the IRS… ouch!
Afterwards, they look at their retirement account statement and it’s been all but wiped out. They are in their late 40s to late 50s and for the first time an alarm goes off in their head and that says “How am I ever going to retire?”
My message is don’t let that happen to you. Check out episode 10 of The Alemian File, and do it right after you finish watching this video. If you haven’t started a retirement plan using an indexed universal life insurance policy, contact someone today and get it done.
Do just do those two things and you will have taken a huge step in the right direction and you'll feel so much better.
If you have questions send me an email to David@TheAlemianFile.com. Check out my website PhysiciansRetirementPlan.com. Make sure you come back here next week to Physicians Money Digest for another edition of The Alemian File.