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Introduction

Fund Your Retirement Plans First

As long as it is in line with your priorities and your financial plan, you should typically fund your tax-advantaged retirement plans before funding your college investment program. Your financial future is important and that should be your primary focus.

An Argument for Funding Your Retirement Plans First

Retirement Plans*

College Investment Program

The investments you make toward most retirement plans are tax-advantaged.1

The investments you make toward college funding programs may not be tax-advantaged.

The income earned in most retirement plans is not taxed until you take it out at retirement.1

The income earned in college funding accounts may be taxed currently (there are some exceptions such as Series EE and Series I Savings Bonds, Education Savings Accounts, and Qualified Tuition Programs).

Retirement plan assets are not typically considered assets when you apply for financial aid. This increases your chances of getting financial aid.

Assets accumulated in college investment accounts may decrease the chances of getting financial aid.

Having your financial future funded gives you the confidence to help your children in many ways, not just helping them find ways to pay for college.

If you fund college and you're not making progress on your own financial future, not only are you giving up tax benefits, you're putting your own financial future at risk.

*IRAs, 401(k) plans, 403(b) plans, Keoghs, etc.

1 Contributions to a Roth IRA are not tax deductible. The Roth IRA offers tax-deferred growth of your investments. Withdrawals from the account may be tax free, as long as they are considered qualified.  Limitations and restrictions may apply.  Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax.  Future tax laws can change at any time and may impact the benefits of Roth IRAs.  Their tax treatment may change.

 

*Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. BancorpSouth Wealth Management is a trade name of BancorpSouth Bank, a division of Cadence Bank. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

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