Can you truly afford to help your kids with college?
With student-loan debt at an all-time high, many parents are rushing to help foot the bill. But should they? This question has been trending lately, and for good reason. Parents who help kids pay for college — but do so to the detriment of their retirement savings — may wind up trading one financial problem (their children's debt) for another (they may never retire). A couple I met with recently provided the perfect example of how this happens. Ted and Linda were well into their 60s, lacking adequate retirement funds and wondering what to do next. They had refinanced their home four times and still owed about a quarter of its value, they said. They weren't sure they could afford to stay there, yet they would need to invest some money into remodeling if they hoped to sell. The kicker is, the couple had been supporting their adult kids all along, paying some of their college tuition, ponying up living expenses and even putting gas in one child's car. These "kids," as they called them, were also 28, 26 and 21 years old! For Ted and Linda, getting their kids through college was a goal they felt strongly about. To help them avoid debt, however, they sacrificed their own financial security. This has become the new norm, said certified financial planner Joseph Carbone Jr., a wealth advisor at Focus Planning Group. "I am not sure when the mentality of parents and society shifted to the point where it's now the parent's responsibility to pay for 100 percent of all of their kid's education — but it has." Carbone gets questions on paying for college from his clients all the time. Most of the time, the parents mean well and truly want to help. The problem is, they don't know how to draw the line between helping others and hurting themselves. More from FA Playbook: Real advisors don't fear new fiduciary rules How hobbyist investors earn interest on their interests Tax returns can tell you a...Read the full article here