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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

May/June 2022

Balance Saving for College and Retirement

Family stone balance

School's out. Summer's here. As parents, you need to think further ahead than summer camp. When it comes to choosing between saving for a child's college education or saving for retirement, which one should be the priority?


Sure, you want to minimize the amount your child will owe for student loans. But keep in mind that there are no loans for retirement if you come up short on your savings.


While there are no hard and fast rules about prioritizing your savings, the usual recommendation is to put aside money for retirement first. Your personal circumstances should be your guide. Here are several things to consider.


How Much Have You Saved?
If you already have significant retirement savings, you may be able to direct more money toward saving for your children’s college expenses. Be sure to run the numbers first, so you know you can afford to do this. However, make sure you’re still contributing enough to your company’s retirement plan to take advantage of employer matching funds.


Contribute to a 529 Plan
A 529 plan allows you to make after-tax contributions to an investment account on behalf of a designated beneficiary. One upside: Parents may be able to contribute less if others are chipping in. Grandparents, other relatives, and friends can contribute to the account. Withdrawals are tax free if they’re used to pay qualified education expenses, including tuition, room and board, fees, books, and supplies.


Open a Roth IRA
Although typically for retirement savings, a Roth IRA can do double duty as a college fund. You won’t pay a penalty on earnings you withdraw to pay qualified higher education expenses if the account has been open for five years or longer. Any funds remaining in the IRA will still be invested for your retirement.


Other Payment Options
There are a variety of ways to pay for college, including financial aid, loans, and work study. In addition, many organizations offer scholarships to students whose interests align with their mission.


Start early. Work with your school’s counselor throughout high school to learn how to qualify for aid.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
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