How Not to Let Baby Derail Your Retirement Planning


New babies are an adorable, lovable, miraculous way to stress out parents. There will be good days, like when baby takes the first steps. Then there will be bad days, like runny noses and fevers. One constant that can begin even before baby’s arrival is the stress a new baby places on a family’s budget.

The list of “must haves” seems endless: nappies, clothing, nursery set up, toys, meals, medical care, on and on in endless progression, always changing as baby grows. The cherry on the top is the savings for baby’s university.

Through it all, parents have to find a way to prepare for the retirement years they will face after baby is grown and off to seek his or her own fortune in the world. Recently, a study found that British workers are the worst in the world in preparing for retirement. More and more often, Britons are sacrificing their retirement savings to pay for their children’s college costs.

It can be done

Most financial planning experts advise that parents save for their retirement before squirreling away funds for their children’s college. While most parents will assert that they are willing to delay their retirement in order to pay for their children’s education, this is generally not recommended. It can be difficult, but saving for retirement while also helping children afford college can be done.


It is always a good idea to examine your priorities before baby is born. Determine which is more important to you: your desire to pay for your children’s university, or your wish to not become a burden to your children in your later years.

Once you’ve determined your priorities, you can plan accordingly. There are several strategies that may help if your plan is to save for both college and retirement.

Pay yourself

If your place of employment offers a retirement savings plan, budget a contribution up to the employer match. This will get you tax savings and free money down the line. If your employer doesn’t have a retirement savings plan or you are self-employed, you need to set up a savings plan on your own.

Engage the services of a financial adviser who can get you started with some investing and who can handle your portfolio management for you. You’re parenting on top of everything else; you have enough to do.

Emergency funding comes first

Every household should have an emergency fund. You’ll want to save up at least enough money to cover living expenses for you and your family for six months. This is the money you’ll use for unexpected happenings such as the basement flooding or the transmission dropping out, or in the event you lose your job and have to seek other employment.

University savings

Once you have your emergency fund in place and you’ve begun your retirement portfolio, then you can work up your household budget to include a contribution to college savings each month. Your financial adviser can give you some pointers on what type of savings arrangement would work best for your children’s future needs.

Don’t panic if you can’t manage to save enough to completely cover the costs of college for your children. Every bit you’ve set aside for them will help, and they have other options for funding college.

Just remember that your children have options, even if they have to borrow to cover college. You, however, can’t borrow your way through retirement.

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