How to Save for Retirement and College at the Same Time

It'd be great if there was enough time to tackle your financial goals one at a time. But life just isn't like that. These days, college and retirement are two of the most expensive goals to have-but you can save for them both at the same time. Here's how, in three basic steps:

1. Make sure your retirement accounts are fully funded.

Your kids can take out education loans, but there's no such thing as a retirement loan. So before adding money to your children's college funds, make sure you've maxed out your IRA for the year. If your employer offers a 401(k) match, contribute at least enough to get the full matching amount.

2. Use special college savings programs that can boost your savings.

Once you've socked away some retirement money, check out 529 college savings plans. The money invested grows tax-free and withdrawals are exempt from federal income taxes when used for qualified higher-education expenses. In some states, qualified withdrawals are also free from state income taxes and contributions may be tax deductible as well.

The availability of the tax or other benefits mentioned above may be conditioned on meeting certain requirements.

Investors should consider the investment objectives, risks, charges and expenses associated with 529 plans carefully before investing. More information about 529 plans is available in the issuer's official statement which should be read carefully before investing.

Upromise is another great program, and it won't cost you a thing. Once you sign up, you can earn rewards for your everyday purchases. Everything from groceries to online shopping ... even buying a house. Those rewards can be added to your college savings plan, and they can definitely add up. 

3. Make sure some of your investments are flexible.

You might not know in advance how much college will cost. Or retirement, for that matter. Think about putting some of your savings into a general investment account that could be used for either goal.

Mutual funds are one financial solution. Mutual funds offer a variety of portfolios with objectives that range from conservative to aggressive. No matter what your time horizon or your risk tolerance, there's a mutual fund to help meet your needs.

Investors should consider the investment objectives, risks, charges and expenses of mutual funds carefully before investing. More information about mutual funds is available in the prospectus which should be read carefully before investing.

Disclaimer:
You should carefully consider the investment objectives, risks, charges and expenses of mutual funds before purchasing shares or investing money.  Additional information about these and other subjects can be found in the mutual fund prospectus. To obtain a prospectus, please contact your Allstate Personal Financial Representative. Please read the prospectus carefully before purchasing shares or sending money.

You should carefully consider the investment objectives, risks, charges and expenses of 529 college savings plans before purchasing or investing money. Additional information about these and other subjects can be found in the Plan Description. You may obtain copies of the Plan Description from your Allstate Personal Financial Representative. Please read the Plan Description carefully before purchasing or sending money.

Securities offered by Personal Financial Representatives through Allstate Financial Services, LLC (LSA Securities in LA and PA).  Registered Broker-Dealer. Member FINRA, SIPC, Main Office: 2920 South 84th Street, Lincoln, NE 68506, 877-525-5727.

Make This Work for You ...in 15 minutes or less  Sign up for Upromise  Use our Retirement Snapshot Tool to get an idea of how your retirement savings will add up ...in 1 hour or less  Invite your friends and family to sign up for Upromise rewards that will be credited to your account  Look into 529 plans for your state

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