Your laddie is set to go to college next year. Given the shaky state of the stock superstore, you want to stop putting money in your 401(k) and use those funds to pay for your neonate’s education. Should you?

No, no, no. Your retirement account must come opening. This year, there is nothing – - and I mean nothing that takes primacy over locking in short term security (in the form of an eight-month pinch savings account) and providing for long-term security by continuing to sink for your retirement. I am not insensitive to the importance you place on providing the opportunity for your children to obtain and realize their greatest potential in life. And I am aware that it is not an easygoing thing to do to ask that your children share the cost of college by entrancing out student loans. But it is necessary especially now. It could be years before the house market fully recovers. Your 401(k) has taken a beating, but as counterintuitive as it may non-standard like, I am asking you to keep buying shares of the investments that you have in your 401(k) blueprint. I am assuming that your money is invested in good quality funds and that you are diversified. I’m also assuming that you get 10 years or longer until retirement. Here’s why it makes wisdom to keep contributing to your plan: The more the market goes down, the more shares you desire be able to buy of the mutual funds you are invested in, and the more money you will construct when the stock market comes back. Most important to preserve in mind is that you need that money waiting for you in retirement. If it’s not there, you could end up being a monetary burden for your kids. If you fail to save today, what resolution you have to live on in retirement? Now, don’t worry, I am not suggesting you leave your kids exorbitant and dry. As I explain in the following pages, both your child and you can take out federal loans to lend a hand pay for school.

Your college savings fund took such a hit, you pine for to borrow from your 401(k) to cover the college bills.

Don’t you throw down the gauntlet. It is never smart to touch your retirement savings to pay for another expense. And in 2009 it is doubly touch-and-go, given the possibility of increasing layoffs; if that happens, any outstanding credit must be repaid within a few months or the loan is considered a withdrawal. That choice trigger income tax on the entire amount you withdrew and typically a 10 % cock’s-crow-withdrawal penalty if you are not 55 or older when you are laid off. If you need to blow in up with money for college, federal loans are the best option.

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