Description: The article is about trowe login. This is an interview between the host of your future your finances and the interviewee who comes from T Rowe Price. The interviewee talks about the importance of having retirement plan before retirement.
Welcome to your future your finances. The show is all about important information concerning financial topics,guiding your career,guiding your future and we have a lot of great guests giving you great tips on the goals that you may have wherever you’re trying to go.
My name is Brian and today we have Judith Ward from T Rowe Price,welcome to the show. We’ll talk about saving for college or retirement planning and investing a number of things.
I’m also a certified financial planner and my passion is helping individuals make sound financial decisions and at T Rowe price,we’re an investment management firm,but we also help individuals and also advisers with these decisions that individuals face around such as retirement planning and personal finance issues. That’s where I come in. We are helping to lend a voice to those kinds of issues that face individuals.
You did a survey of balancing between college readiness and retirement readiness,what was the result of that? We did it,we called it the financial trade-off survey,we surveyed parents who are saving for retirement as well as having children that they’re concerned about saving for college costs in the future.
We surveyed about how they were balancing these priorities and what we found was that a majority of parents were prioritizing saving for college over saving for their own retirement which surprised me a little bit.
I can understand in one regard being a parent myself that we always want to put our kids first and we make sacrifices for our children. College is a more tangible goal,it’s probably a goal that’s going to come sooner,it’s also very emotional for parents who want to do the best thing for their children.
I can certainly understand why parents want to sacrifice their future for their kids. However, as a financial planner,we have to save for our own retirement and we have to make that a priority. I was a little disappointed to see that it wasn’t the priority when we talked to these parents.
You’ll talk to them in surveys and wellness programs and what you do and tell them how to balance those goals. We think the first thing that you need to look at is how you are tracking for retirement. We think about our own retirement,we can be in retirement for decades.
We need our funds to last for decades. I know a lot of your viewers,they might have the benefit of a government pension because there are a lot of jobs in the government in this area,pensions is a thing of the past for those of us in the private sector.
There are also Social Security benefits, so you have to consider what those reliable sources of income in retirement are. It depends on how much they are and how much you are going to rely on your personal savings. That’s the part where we try to get individuals to understand. That is going to determine their success in retirement. It’s the thing that they can control,they can control how much they’re able to save for retirement.
Do you get parents who think that it’s impossible to save for college in that it is too expensive and growing too fast in cost? Absolutely,some parents don’t know how they’re going to do it all. They don’t know how to save for their own retirement and save for their kids college. One of the ideas that we put out there is that if you’re on a good track for retirement,you can save the payment for college.
We did some analyses and we found that you have to save four hundred and fifty dollars a month from the time the child was born to fully fund four years of an in-state school,that’s quite a lot. And the money is calculated after tax. When parents hear that and they can know that,that’s a lot.
We have thought about this idea of a down payment for college,trying not fund everything, maybe fund half,you can save two hundred dollars a month of that if you’re able to work that into your budgeting to take care of those future costs.
When I do those calculators I find,I look at the cost of the schools,they’ll include room and board,sometimes parents will think it’s a little bit more attainable if they remove that part and cover the tuition,have you ever come across that?
Absolutely,when I talk to parents,it doesn’t have to be whatever College at whatever cause even though we want to do what we think is the best for our kids. But you can certainly put parameters around what I call the college buying decision. In the case of my own situation,my son went to a private school, but he was able to commute, so he lived at home for a few years, we did not have to pay the room and board.
To your point,the room and board can be as much than the tuition itself. I know a lot of parents are looking at Community College first,they might have their kids take AP classes, so they’re getting a lot of credits out of the way before they even start college.
There are a lot of different ways that you can finance that college or look at that buying decision,there are not a whole lot of ways that you’re going to be able to do that for your own retirements. That’s why we think saving for retirement has to take priority.
You need to negotiate with your children about you’re going to do.For example they have a little extra money and they want to save for college where should they invest or save? T Rowe price has college 529 savings account,it is an account that’s specifically designed for college savings. You put the money in,you will most likely get a state tax deduction,it grows tax-deferred and when it’s used for qualified expenses,it’s tax-free.
The qualified expenses are quite broad,it can be used at any school,the parent remains in control of the funds is used for the beneficiary and you can change that beneficiary if something happens,maybe your child gets a full ride, but you can use it for another child,we like the college 529 accounts for saving for college.
Do you have a website talking about 529 college savings? Yes,we do,we had a little campaign for parents who were freaked out about this whole thought about saving for these astronomical costs of college,it was called the college savings chillout campaign.
The idea was to try to get parents to chill out a little bit. It’s college savings chillout.com,there are some great resources for parents to learn about the college savings decisions. There are also some resources to at least help them maybe get started with a college 529 account.