Author: Katie Montagazzi

  • A Strategic Approach to Balancing College Costs and Retirement Goals 

    For many parents, the desire to fund their child’s education is strong. Striking the right balance between saving for college and ensuring a secure retirement, however, requires careful financial planning. With the right strategies, families can make progress towards both priorities without unnecessary financial strain. 

    Why Parents Should Consider Not Sacrificing Retirement for Tuition 

    It’s natural to want to provide the best opportunities for your children, but delaying or reducing retirement savings to pay for college could have long-term consequences. Unlike college tuition, which offers various funding options like student loans and scholarships, there are no loans for retirement. Prioritizing your future financial security can help ensure that you won’t become a financial burden on your children later in life. 

    Additionally, withdrawing from retirement accounts early or reducing contributions could mean missing out on years of compound interest, potentially making it harder to reach retirement goals. Instead, parents should aim for a balanced approach that considers both short-term education costs and long-term financial stability. 

    Strategies for Funding Both Without Financial Strain 

    Achieving a balance between paying for college and securing retirement requires a well-thought-out plan. Here are some key strategies to consider: 

    1. Maximize Tax-Advantaged Savings Accounts 

    Using tax-advantaged savings vehicles can help optimize both education and retirement savings: 

    • 529 Accounts: A 529 account allows parents to save for college while benefiting from tax-free withdrawals for qualified expenses. Some states also offer tax deductions for contributions. 
    • Coverdell Education Savings Accounts (ESAs): These accounts offer tax-free growth for education expenses, though they have lower contribution limits than 529 accounts. 
    • Retirement Accounts (401(k), IRA, Roth IRA): Contributing to retirement accounts should remain a priority. Some retirement accounts allow penalty-free withdrawals for education expenses, but typically this should only be a last resort. 

    2. Encourage Student Contributions 

    Students can play an active role in funding their education. Encourage them to apply for scholarships, consider work-study programs, or take on part-time jobs to reduce the financial burden. Student loans are another option, and with strategic borrowing, they can help bridge the gap without overburdening the family. 

    3. Set a Realistic Budget and Explore Cost-Effective Education Options 

    Not all colleges come with a hefty price tag. Families could explore in-state public universities, community colleges, or schools that may offer generous financial aid packages. Creating a clear college budget can help costs remain manageable without derailing retirement plans. 

    4. Work with Confluence Financial Partners to Optimize Your Financial Plan 

    At Confluence Financial Partners, we can help families develop a comprehensive plan that balances saving for college and retirement. Our wealth managers can provide strategies for: 

    • Allocating investments to optimize tax advantages 
    • Adjusting financial priorities based on income and expenses 
    • Identifying the best ways to use student loans strategically 
    • Exploring alternative funding sources, such as employer tuition assistance programs 

    We take a personalized approach, helping you create a strategy that best aligns with your unique financial goals while helping create long-term stability for both education and retirement. 

    Final Thoughts 

    Balancing college costs and retirement savings doesn’t have to be an either-or decision. By utilizing smart financial strategies, leveraging tax-advantaged savings vehicles like 529 accounts, and working with a financial planner like Confluence Financial Partners, families can simultaneously plan for their children’s education and their own retirement. It is key to start early, plan strategically, and make informed financial decisions that support long-term financial health. 

    If you’re ready to create a customized plan that considers both your retirement and your child’s education, contact Confluence Financial Partners today. 

    Katie Montagazzi
    About the Author

    Katie has a passion for connecting with people and building relationships, which has been foundational to her work in marketing and wealth management. This passion drives her in helping clients and associates solve challenges and seize opportunities.

    Sewickley

    724-719-6600
    katie.montagazzi@confluencefp.com
    Email Katie

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    Katie Montagazzi

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  • How to Nurture Moneywise Children

    Teach your children to treasure their financial legacy.

    Most parents appreciate the importance of traditional education in their child’s development considering the obvious intellectual and social benefits. Yet all too many forget that a financial education is also crucial for ensuring their offspring’s long-term well-being.The good news is it’s never too early or too late to begin sharing your financial wisdom and experiences with your family. By taking the time to teach your children the value of money, you’ll have the comfort of knowing they’ll understand how to care for their own financial legacy when the time comes.

    An Essential Skill

    Like reading, financial literacy is an essential skill, but unfortunately, it’s not typically taught in school. Rather, it’s up to parents to pass on their financial knowledge to ensure the next generation is capable of taking care of the wealth they’ve built.

    Pre-kindergarten age is a great time to introduce the basics, including the idea that you must work to earn money in order to pay for items and services, as well as the value of different coins and bills. As they get a little older, your child can start doing chores and earning an allowance. Help them go through the motions of saving up for something they’d like to buy and deciding whether or not it’s a worthwhile purchase.

    With pre-teens and teenagers, there are several other steps you can take, such as helping them open a savings account with their earnings from chores, babysitting or other jobs. Share your own tips on managing a budget and introduce them to the concept of investing and saving for retirement. Simply being transparent with your children about the realities and costs of living can go a long way in preparing them for the future.

    Sharing Your Financial Legacy

    While products such as trusts and wills can help ensure your wishes are carried out, they can’t give your heirs the true understanding of how to save, grow and spend money wisely. In fact, if your children are going to receive a sizable inheritance, they may get overwhelmed by sudden wealth without a solid foundation to rely on. It’s also a good idea to introduce your children, when they’re ready, to your financial advisor and other professional partners, so they’ll know where to find expert guidance when dealing with money issues.

    Next Steps

    • Write out a sample budget with your children, explaining the expenses you have each month, such as utilities and groceries
    • Help them open a savings or checking account
    • Schedule a time for them to join you for a meeting with your financial advisor

    Family and Life Events

    August 14, 2019

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    Katie Montagazzi

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  • Make Lasting Memories by Savoring Life’s Simple Joys

    Make Lasting Memories by Savoring Life’s Simple Joys

    While extravagant vacations are great, you don’t need to spend a lot of money to make meaningful memories with your loved ones. A slow morning on the first day of summer. Baking cookies with the littles. A great meal surrounded by close friends or family. The best memories come in all shapes and sizes, both planned and unplanned. And while there’s nothing like going on that vacation you’ve been looking forward to for months, sometimes it’s the small, unexpected delights that stay with us the longest.

    So how can you lead a life with more moments worth savoring? Here are a few tips to help you get started.

    Focus on the Little Things

    There’s nothing wrong with a bucket list full of exotic travel destinations or goals to buy that yacht or plan a big family reunion. After all, helping you work toward those goals is what a well-planned life is all about. Still, that’s usually not our day-to-day life. There are so many moments in between those grander experiences that are opportunities to explore smaller joys that, when added together, can be just as memorable or fulfilling as a big trip.

    Start by picturing your perfect day. What do you do or eat? Who and what do you see? Perhaps it’s reading a book, listening to music or getting outside. Maybe you want to spend more time with close friends. After thinking it over, consider how to bring a few of those elements into your regular routine.

    For example, maybe you want to get outside and see one of your friends more often. Consider putting a weekly date on the calendar with them to go for a walk, helping you fulfill both goals. Or perhaps you want to spend more time with your grandkids and also do more at-home cooking. Can the kids help? It could turn into an opportunity to not only spend time together, but for you to share some of your skills and insights with the next generation – doing something as simple as making a pizza.

    When trying to find ways to bring the whole family together, consider what everyone is most interested in. Do your kids or grandkids have favorite activities you can do together? Maybe it’s going to an escape room or planning a watch party for their favorite show. Better yet, take turns choosing the plans for a monthly get-together. Experiences are a great way to connect and they make excellent gifts, too.

    Commit to Unplugging

    Social media has given us unprecedented access to loved ones near and far, and it’s made it easier than ever to share our lives (for better or for worse). But while it makes capturing a moment so easy, social media can also put extra pressure on ourselves and our experiences to be and look perfect – making it that much harder to cultivate and cherish authentic memories.

    Moreover, according to Psychology Today, the average American has five social media accounts and spends an hour and 20 minutes each day browsing their feeds. That’s more than 37 hours every month! Imagine the memories we could create over a year with that time.

    If you’ve found yourself getting sucked into social media, consider taking a break or limiting the time you spend scrolling. Time management apps and new settings on phones allow you to set timers so you receive an alert when you’ve gone over your allotted time on specific apps.

    Learn to Be Present

    It’s hard to fully take in a great moment when we’re distracted, whether by our never-ending to-do list or our phone. Learning how to quiet our mind for even short periods of time can leave us open for moments of serendipity and spontaneity. Perhaps you run into a friend at the grocery store and decide to catch up over lunch, or spot a bed of flowers in full bloom while on a walk – both things you may have missed while checking your phone or worrying over all the errands on your list.

    Meditation has been proven to help reduce stress and anxiety while improving our concentration. And with several popular apps out there with guided meditations, it’s never been easier to give it a try. While some require subscriptions, most offer a free trial so you can see how you like it before making a commitment.

    Enjoy the Moments Worth Living For

    Living for the moment is all about applying that stop-and-smell-the-roses mindset to your daily life. That way, even when you aren’t cruising the Mediterranean or celebrating your birthday with a bash, you might just stumble upon a few more exciting moments and soak up some extra memories along the way.

    Sources: Psychology Today; Huffington Post

    Raymond James is not affiliated with any organizations mentioned.

    Family and Life Events

    June 26, 2019

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    Katie Montagazzi

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