Contributing to your grandchildren’s college savings is a wonderful idea. You can reduce worry and financial stress for your own children during their peak career years, enabling them to save more effectively for their own retirement. You can lower the likelihood that student debt will be a burden on the family. And your gifts may even be part of a smart estate plan.
Celebrating as a family member graduates from high school and attends college is the culmination of years of hard work and a joyous event. Paying for college, however, remains a significant source of stress for many households.
It’s that time of year—the potential of receiving a college acceptance letter makes checking the mail a little more exciting than usual. The cost of college has jumped four times as fast as the rate of inflation over the last ten years. The numbers facing students (and their parents) are staggering. College is expensive and can leave graduates suffering under a huge financial burden well into their professional lives. It’s bad enough that the cost of higher education creates such a burden for students, but families can also suffer. Parents who foot the bill for their children’s education can find themselves unwittingly making tradeoffs with severe consequences for their own retirement. So how can you help your child get through college without sacrificing your retirement?