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Vail Daily column: Gen X’ers must juggle money, time

If you’re an older member of Generation X — if you were born in the early- to mid-1960s — then you may have a lot of balls in the air.

You are saving for your own retirement — which might not be far away — while at the same time possibly wanting to help pay for your children’s college education. And you may also be assisting your aging parents in some ways.

How can you manage this juggling act?



You need to emphasize your retirement. Now that you are likely near your peak earning years, you should contribute as much as you can afford to your 401(k) or employer-sponsored retirement plan. Your plan likely offers a range of investment options, so you can create a portfolio appropriate for your needs. The money in your 401(k) or similar plan can grow on a tax-deferred basis, and your contributions are typically made with pretax dollars. The more you put in, the lower your annual taxable income. You won’t have to pay taxes until you take withdrawals, but if you do withdraw money before you reach 59½, then the withdrawals may be subject to a 10 percent IRS penalty.

Even if you’re contributing to a 401(k) or similar plan, then you’re probably still eligible to contribute to an IRA. Like a 401(k), a traditional IRA offers tax-deferred growth potential, while a Roth IRA can provide tax-free earnings distributions if you’ve had your account at least five years and don’t take withdrawals until you’re at least 59½.



Parents and children

If you devote most of your investable income to your retirement plans, you may not have much left to help pay for your children’s college education. But that may not be a disaster — after all, they could get scholarships and financial aid. And even if they need to take out student loans, then they have a lot more years to pay them back than you have until your retirement. If you can afford to help your children, then choose a smart college-savings vehicle, such as a 529 plan, which offers tax-free earnings distributions as long as the money is used exclusively for qualified higher education expenses.

How can you best help your elderly parents? Hopefully, they will not require any outright financial assistance from you — but that doesn’t mean you can’t assist them in other ways. If you haven’t already done so, then try to find out as much as you can about their estate plans and any arrangements they’ve made should they become incapacitated.



• Have they named a durable power of attorney?

• Have they chosen an executor for their estate?

• Have they thought about how they would pay for any long-term care services they might need?

It may not be that easy to have these conversations, but they are important.

Clearly, as a Gen X’er concerned about retirement, college-age children and aging parents, you’ll have a balancing act involving both money and time. But with planning, patience and realistic expectations, you can help yourself and the ones you love.

This article was written by Edward Jones for use by your local Edward Jones financial adviser. Edward Jones and its associates and financial advisers do not provide tax or legal advice. Chuck Smallwood, Bret Hooper, Tina DeWitt, Charlie Wick, Chris Murray, Kevin Brubeck and Dolly Schaub are financial advisers with Edward Jones Investments. They can be reached in Edwards at 970-926-1728 and in Eagle at 970-328-4959 and 970-328-0361.


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