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Should I Save for College or Retirement?

If you have to choose one, choose to save for your future

En español | Your retirement plans may coincide with your children entering or completing college. If you didn't start saving for tuition the moment your kids were born, but retirement is just around the corner, you might feel a bit overwhelmed about your finances. What should you save for – college? Retirement? Both?

See also: Don't make these 5 common financial mistakes.

If this is your dilemma, you're not alone. Many financial experts point straight to "The Airplane Rule." You know, when there's a change in cabin pressure you put on your own oxygen mask first, then put on your child's. With regards to retirement, this means putting your retirement saving first. If you don't, you won't be in a position to help your child.

Coin path leading to paper money house- should I save for retirement or for my child's college

There are more ways to pay for college than there are for retirement. — Photo by: Vstock/Tetra/Corbis

If you save for tuition first, you might not have enough to cover your retirement expenses and find yourself leaning on your children for support. But keep in mind, your children might not be able to financially help you down the road, either.

College tuition is astronomical compared to 40 years ago, but options to pay for school have never been greater. There are scholarships, grants and loans, along with work-study programs and the old-fashioned "work your way through school.'" Unfortunately, when it comes to funding retirement, these options don't exist except for employment.

Even though surveys consistently show that boomers expect to work past retirement age, unemployment rates remain high for workers age 50 and over.

Ideally, we should aim to set aside enough money for tuition and retirement simultaneously, if that's possible. If not, it's critical for parents to secure retirement finances first before funding children's education expenses.

Next: Crunch the numbers and talk to a financial advisor. >>

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