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WHAT THE EXPERTS SAY
It isn’t the kids’ college expenses that Adam and Chloe need to be worried about. “With only $35,000 in retirement, their priority should be saving 10 percent of their gross income for retirement each year until they’ve saved the equivalent of one year’s salary,” says Dunleavey. Chatzky agrees. “You have to fund your retirement before you fund your children’s college education. A lot of parents have this overwhelming sense that they must do everything for their kids,” she says. “But you can get financial aid for college. You cannot get financial aid for retirement.”
As for the couple’s real-estate plans, both Chatzky and Dunleavey say it’s too risky for Adam and Chloe to put their college and retirement investments in that one basket. “You have no idea whether buying a building and becoming a landlord will turn out to be an albatross or a pot of gold,” says Dunleavey. “Diversification of assets is key.” Once Adam and Chloe have plenty of funds squirreled away in various retirement savings accounts, only then do the experts suggest that they start saving to become the Brooklyn Trumps and funding their kids’ college expenses.
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