How to Fund Your Kids' College Education Without Sacrificing Your Retirement

A lot of the money advice out there tends to focus on young people and Millennials, and highlights all the financial pitfalls that they face and what to do to avoid them. In reality, the stakes are much higher for older people.

The middle-aged set has fewer years left in the workforce, thus less time to save for retirement. The financial mistakes that happen in your 40s and 50s can have dire consequences down the line.

One of these missteps is borrowing from 401(k) plans to pay for your children's college education.

Paying for college has become extremely difficult. College costs are rising at least twice as fast as inflation every year. The College Board just reported the average price for tuition and fees at a public four-year school is nearly $9,000, and that figure more than doubles if you add room and board costs. If you want to attend that same public four-year school as an out-of-state student, tuition more than doubles from $9,000 to $22,000, and it's another $9,000 a year for room and board.

Paying For Your Kids' Education Shouldn't Derail Your Retirement

While paying for your children's education is extremely important, you shouldn't have to sacrifice your financial future. In order to balance the priorities, you should:

• Research alternative savings programs, such as 529 plans, as early as possible to start saving for your children's tuition.
• Investigate funding sources like Federal PLUS loans and foundations such as www.foundationcenter.org that grant deserving students scholarships. Also, many states sponsor programs that assist with education planning in the forms of prepaid trusts.
• Understand that a 401(k) plan is a retirement savings vehicle, not a bank account.
• Realize that while you can take out loans to fund a college education, there is no loan for retirement. My parents always told me to "pay yourself first."

While your child's education is an investment in his or her future, saving for retirement is an investment in yours. You don't need to sacrifice one for the other.