Should You Save for College or Retirement First?
00:00:00.000 | I want to talk about education investing and specifically where I think 529 plans fit into
00:00:04.820 | this framework to save for the cost of college for your children or maybe yourself. Here's my
00:00:09.600 | general philosophy. You shouldn't put your child's education ahead of your own financial future.
00:00:13.940 | You can borrow for college, often at reasonable rates, but you can't easily borrow for your own
00:00:19.060 | retirement. 529s do offer tax-free growth for qualified education expenses, and they can be a
00:00:24.400 | really great tool if you know you are going to save to pay for college. However, I like to think
00:00:29.500 | about those as secondary to saving for myself, but there are a few exceptions. If you are in a
00:00:34.220 | high-income household and you're already on track to fund your future and you know you're going to
00:00:38.260 | get there, you could absolutely make the case to move some of your 529 contributions up earlier in
00:00:43.300 | this framework. Or if you live in a state that offers really generous state income tax deductions
00:00:47.900 | or credits for 529s, which California sadly doesn't, then it could make sense to prioritize this a little