Younger parents are often faced with the difficult choice of taking care of long-term retirement needs or steering efforts toward ensuring future college expenses are handled. Both may be a long way off, but each will likely require significant savings and growth via intelligent investing.

Plan Accordingly

It’s important to have a sense for how much money will be needed in order to realistically evaluate options and plan successfully. If you want $1 million to withdraw from in retirement, that amount may determine your current savings priority.

After all, if you’re 10-20 years away from retirement with little accumulated savings so far, then it is likely time to buckle down and sock away a significant portion of income in the coming years. Be sure to take advantage of retirement plans such as a 401(k) or 403(b) for pre-tax savings plus potential employer matching contributions. And with a long-term horizon, plus more years in retirement, maximize the allocation to global stocks for increased growth potential.

Maximize Your Savings

Consider strategies that would lessen demand for retirement savings and possibly allow for building a college investment account.

Can you delay retirement to possibly age 70 and also hold off starting Social Security distributions? If so, that would be great, because less money will need to be saved since you’d have fewer retirement years to fund and your income from Social Security would be significantly higher.

Additional methods include continuing to work part-time during retirement, simplifying your lifestyle to reduce spending needs, and staying invested in stocks.

Minimize Expenses

Although challenging, it is certainly preferable to set aside money expected for college rather than rack up huge loans to be paid back after (hopefully) your children graduate. If they start a family and buy a house, adding a monthly loan repayment expense on top can be crushing. So all the better if that can be avoided. Getting good grades in high school, taking advantage of grants and work study, or completing as many classes as possible at a community college are excellent ways to minimize an eventual college price tag.

Save for Your Kids

To start saving for a child, consider utilizing an inexpensive 529 college savings plan. Grandparents, other relatives, and friends can also help out. Earnings grow tax deferred, qualified withdrawals are tax-free, and states like New York allow a deduction for contributions when filing income taxes. Select a well-diversified investment portfolio, and while children are young, maintain a higher percentage of equity exposure.

Keep in mind the 4-year cost of attending a public university likely totals over $100,000. If you can’t save that much, then you may want to utilize the stock market for its potential for growth above that of a typical savings account or certificate of deposit.

Talk with a Financial Planner

It’s natural for all this to confuse many folks, especially when trying to accurately weigh competing financial requirements while realistically incorporating future costs, inflation, and investment returns. It may be something better discussed with a competent financial planner rather than risk unfortunate errors struggling on your own. Besides, a good planner has paid for an education and is now preparing for retirement, so he or she will fully relate to whatever situation you are grappling with and can help you meet the goals you are looking to reach.