For Mark Roberts’ Use: For many families, saving for college and paying off the subsequent loans has an enormous impact on retirement timing. While it is always a great idea to pay off large debts like college loans before retiring, you shouldn’t assume that your children will automatically have a lot of educational expenses. There are a couple of ways to address this problem.

First, you probably already know that saving for college ahead of time is a better plan than going into debt and paying for it later. For one thing, the money you set aside for your child’s college expenses now will collect interest and grow. Even if you’re only able to save a small amount each month, it is better than paying that amount on the back end after they graduate. College loans, like any other kind of loan, do carry interest. Anything you save now will save you money in interest payments later.

The other thing you might not know is that federal financial aid may be available to your children. It’s a common misconception that families must be poor in order to qualify for aid. Eligibility is based on more than just your income, and there are different programs available to you. Never assume that your child won’t qualify; go ahead and fill out a FAFSA (the form used to determine federal financial aid) and you could be surprised with the help you receive.

Financial aid for college can come in the form of Pell Grants, which do not have to be repaid. The average Pell Grant last year was $3,685*. Multiply that figure by four years of college, and you can see the value of filling out that form! There are other federal grants available as well, depending upon financial need. If your child is attending an in-state school, there may be additional state grants available to you, depending upon where you live. Your child’s school may also offer grants based on scholastic achievement, need, or a combination of the two.

In the event that you aren’t approved for any need-based financial aid, remember that you can always reapply if circumstances change. Many couples try to postpone retirement until after the children have graduated college, but disability or other hardship sometimes forces you to reassess that decision. Speak to your financial advisor about the cost of college expenses versus the benefits of working another year or two. They can help you do the math and figure out a way to retire with as little debt as possible.
*The College Board, 2012