If you’re a parent, you want the absolute best for your children. But this decision should not have to come at the expense of your retirement. Yet, every year many parents are tempted to tap into their retirement accounts to pay for college tuition.

This is pretty much always a bad idea, because while there are various ways to pay for an education, saving for retirement will always fall squarely on your shoulders. Plus, it’s impossible to repay yourself for lost time (during which you’ve lost compounding interest on any amount that you withdraw).

So, what can you do instead? As with anything else in life, a little preparation is worth a pound of “cure”.

A 529 college savings plan can help you save for higher-education expenses, which have more than tripled over the past two decades. Today, you can expect to pay an average of $48,510 each year (for tuition, fees, room, and board at a private four-year college). Even with grants and loans, most parents are left with a balance to pay.

Under a 529 savings plan, funds accumulate with taxes deferred. As long as your withdrawals are used for qualified higher education expenses, you don’t owe federal income tax on the money. Many states also exempt the income from their income taxes as well.

All money stashed in your 529 savings account can be placed in a mix of funds, with account allocations becoming more conservative as the child draws closer to college age. Contributions to the fund are considered gifts to the beneficiary, so anyone can contribute (up to $15,000 per year, without incurring gift tax consequences). And, if anything should happen to you in the meantime, assets held within a 529 plan are not considered part of your estate and therefore bypass estate taxes.

For more information on budgeting, planning for major life expenses, and investing for the future, give us a call. When planned properly, there are plenty of ways to pay for college so that you don’t need to touch your retirement funds.