Paying for college without tears

It is possible to help children pay for college without sacrificing retirement savings, but it takes planning and creative thinking, said Timothy Higgins, a certified financial planner. Mr. Higgins, an adviser with CollegePlus.com in Marlborough, Mass., said that there are strategies that parents can use to send their children to college that won't force them to eat into their entire retirement nest egg. In his book "Pay for College Without Sacrificing Your Retirement" (Bay Tree Publishing, 2008), he highlights tactics to help parents save for college without destroying their retirement plans. "I think the biggest mistake is, people aren't looking at the bigger picture," Mr. Higgins said. "I encourage all parents to think like a chief financial officer of their family." It is best to think of college as another financial decision, Mr. Higgins said. A few overlooked college savings options include a Roth individual retirement account, Mr. Higgins said. He said the Roth can be successful because clients can use the money for college, but if they don't need that money for college, then it can be used for their retirement. Mr. Higgins also said that he likes the idea of parents' saving money in a brokerage account because it gives them flexibility with investments that they might not have in a Section 529 plan. He said that in a brokerage account, parents can invest in tax-efficient vehicles such as exchange traded funds and municipal bonds. Likewise, if they find that their child has earned scholarships, they don't have to use this money for education. It could be used for their own retirement. A 529 plan is also effective, Mr. Higgins said, but he pointed out that for parents of older children, it may not be the right choice. Parents of children 15 and older would likely place that money in a more conservative investment because of the shorter time window. Therefore, the opportunity for growth would be less likely.