Elder Care Attorney, Mindy Felinton notes that many parents intend to use retirement savings to pay for their kid’s college education and cautions them against doing so, reporting that it can be more hurtful than helpful and encourages looking into all the different options available to pay for college.
(Gaithersburg, MD) Delray, FL April 27, 2020: Mindy Felinton, founder of Felinton Elder Law & Estate Planning Centers, has posted a new article on her law firm’s website entitled “Your Retirement Plan Is Not Your Kid’s Education Plan.” Ms. Felinton writes, “I don’t often do this, but in this one area I am going to make an unequivocal statement: Don’t even think about using your retirement plan to fund your kids’ college education.”
She is ready and seems to know readers will respond with a wondering “why”? She elaborates, “Well, there are numerous reasons. The most important being that you want your kids to become financially responsible and independent. And, equally important, you want to be able to retire comfortably.”
Felinton goes on to write, “Here are a few more good reasons to add to your list. There are actually ways that paying for your kids college with a tax-advantaged employer retirement plan can really hurt you.” “For instance,” she explains, “if you withdraw anything from your retirement plan before you reach 59 ½ years of age, you’ll be hit with a 10% tax penalty. You’ll also get hit with a tax bill for the tax year in which you make the withdrawal since that money is counted as income.”
“Your kids’ education is important,” says Felinton, adding, “and so is your retirement. It’s important to educate yourself to the many other financial ways of helping your kid get an education.”
Felinton writes, “According to a recent survey by Sallie Mae, one of the nation’s largest student loan lenders, about one-third of Americans with kids under 18 say they plan to use retirement savings or “could use if needed” to help pay for their children’s education.” She also explains, “What many parents don’t understand is that by using their retirement savings to help their kids through college may only put more stress on their children when they see their parents struggling financially in retirement.”
The entire article can be read at https://www.felintonlaw.com/your-retirement-plan-is-not-your-kids-education-plan/
About Mindy Felinton
From a young age, Mindy wanted to be the voice that would make an impact in people’s lives. She became an attorney and has practiced law for over 30 years, so that she could fulfill her desire to help others. As a special prosecutor, Mindy defended the underdog (literally) in cases of animal abuse. As a state attorney in Florida she fought for justice. During the last 25 years, Mindy met many wonderful people who did not know their rights, did not understand the law, and did not know what options were available. She made a decision to focus her practice on Elder Law, Medicaid, Veterans’ benefits, and Estate Planning. Thus she is able to guide her clients through those difficult and sometimes overwhelming processes.