From college savings to retirement, financial planning tips for life's milestones
1. From college savings to retirement, financial planning tips
for life's milestones
Have life-changing events headed your way? Whether it's marriage, the birth of a child, a home
purchase or retirement, you can plan financially for those milestones.
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Eye on Money
#BeReady: From credit card debt to 401(k), your financial questions answered
Want to know the best way to stay out of credit card debt? Or whether to pay off your student loans
or invest in your 401(k)? Jill Schlesinger an...
To start, CBS News financial analyst Jill Schlesinger recommended automating your savings.
"We want you to say, 'Here's a fixed amount every single month. Pull it out of my checking, move it
into savings.' If it's retirement, you want to sign up for that retirement plan, at least into the
[corporate] match, and if you've got more money beyond that, keep going. Try to automate it,"
Schlesinger said Wednesday on "CBS This Morning." "A lot of plans have auto-escalation, meaning a
percentage a year extra can go into your savings."
If you're debating between saving for your child's education or for retirement first, Schlesinger
recommends prioritizing your personal financial security.
"We want you to establish that emergency reserve, pay down your debt, and get your retirement
savings kicked into gear because there is no way to borrow for retirement. Your kids can take out
loans. You have to come first," she said.
To save for college, Schlesinger suggested the 529 plan, a government-sponsored savings plan.
"If you pull the money out for education, there's no tax due. Think of it almost like a Roth for your
college savings," Schlesinger said. "They're great plans."
According to Voya Financial, the 529 plan is meant for higher education expenses, and the earnings
are not subject to federal tax, and usually not to state tax. The contributions are not deductible on
your federal tax return, however.