For many families, saving for both college and retirement can feel like a financial tug-of-war. With rising tuition costs and longer life expectancies, it’s easy to feel like you’re being forced to choose between your children’s future and your own.
The good news? With thoughtful planning, you don’t have to choose.
At Full Circle Financial Planning, we work with families throughout Jackson and beyond to help them strike the right balance between long-term retirement readiness and supporting their children’s educational goals. Here’s how to get started.
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1. Prioritize Retirement First (Yes, First)
It may feel counterintuitive—but prioritizing your own retirement savings is essential. Your children can apply for scholarships, work part-time, or take out student loans. None of those options are available for retirement.
Make sure you’re contributing enough to your retirement accounts (401(k), IRA, SEP IRA, etc.) to stay on track with your goals. If you’re unsure what that looks like, a comprehensive financial plan can provide clarity.
2. Understand Your College Savings Options
There are several tax-advantaged vehicles to help families save for education:
• 529 Plans: These are among the most popular tools for college savings. They offer tax-deferred growth and tax-free withdrawals for qualified education expenses. Many states also offer tax deductions or credits for contributions.
Consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. More information about municipal fund securities is available in the issuer’s official statement. Please read the official statement carefully before investing.
• Custodial Accounts (UGMA/UTMA): These accounts allow for broader spending flexibility, but they can impact financial aid and don’t have the same tax benefits as 529 plans.
• Roth IRAs (in some cases): If retirement is your priority and you want flexibility, Roth IRAs can serve a dual purpose. You can withdraw contributions (but not earnings) for education expenses without penalty.
3. Set Realistic Expectations for College Costs
Not every student needs to attend a $60,000/year private university. Encourage your kids to be part of the conversation early—discuss in-state vs. out-of-state options, community college pathways, and what your family can realistically contribute.
You don’t need to fund 100% of your child’s education. Even covering a portion—say, two years of in-state tuition—can make a major difference.
4. Automate Your Contributions
Whether you’re saving for college, retirement, or both—automation is your best friend.
• Set up monthly transfers to your 529 plan or savings vehicle.
• Increase contributions gradually over time—such as after raises or when other expenses (like daycare) drop off.
Automated savings reduce the temptation to spend and build momentum over time.
5. Coordinate With Financial Aid Strategies
Strategic college savings can also help when it comes to financial aid. How and where assets are held (parent vs. child) can affect eligibility for need-based aid. A well-structured plan can help maximize your savings while minimizing financial aid reductions.
Working with a financial planner who understands the FAFSA, CSS Profile, and aid formulas can be a huge advantage.
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Let’s Make a Plan That Balances Both
There’s no one-size-fits-all solution—but that’s the point. Your financial plan should be personalized to your income, goals, family size, and timeline.
At Full Circle Financial Planning, we help families across Michigan map out a strategy that makes sense. Whether you’re just getting started or trying to play catch-up, we’ll guide you step by step so you can pursue your priorities with confidence.
📞 Ready to talk about how to fit college into your bigger picture? Contact us to schedule a no-obligation conversation.
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