A recent analysis of American debt revealed a huge shift: Borrowers between the ages of 45 and 74 now owe more money in education-related debt, on average, thando younger college graduates.
So, what’s causing this huge increase? While some borrowers are paying on their own student loans, a bigger culprit seems to be an increase in loans meant to assist a child or grandchild. College has gotten more expensive each year. If you are going to consider taking on student loan debt here’s some strategies for you. Don’t step in till a student has maxed out aid options and their own federal loans. Tap a Roth IRA. You can withdraw any amount contributed to a Roth without paying a penalty, if you use the money to fund qualified education expenses, such as tuition and fees. You’d pay tax on any earnings, however, so avoid tapping those until you’re actually retired. Look at alternate loan sources. Limit yourself. Parents should borrow no more, for all children, than their annual household income. You want to have it paid off before retirement. If you have questions call 320-679-5183 or go to yoursafemoneyshow.com.
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