The smartest investment kid's college fund or your retirement?

Editor's Note: The following article was written especially for PRIME. By Larry Glazer Managing Partner, Mayflower Advisors, Boston Special to PRIME With money getting tight, what savings plan do you feel must still be funded your own retirement or the kid's college plan? Larry Glazer, managing partner at Mayflower Advisors in Boston, offers the following advice for families facing tough savings decisions. Pay yourself first According to Glazer, emotion understandably drive many investors to prioritize their childrens goals over their own. But he says for smart families, retirement funds always com first. "If you are not at a minimum maximizing your retirement savings vehicles, such as a company 401K, you should hold off on saving for your child's education," he said. Glazer pointed out that you cannot borrow for retirement, but there are a variety of student loan and financing vehicles that can be used. "We all love our children, but if you have not taken care of your own retirement needs you could be a burden to them in the future," he pointed out. Be a smart saver Glazer emphasizes that when saving for retirement, it's important to control what you can. "Save in a tax-advantaged manner," he said. "And ignore the college calculators . guilt is not always a good motivator." Glazers said these calculators may actually intimidate parents into not saving at all for fear that they could never meet their goal. "College costs are very expensive and have been rising at two-to-three times the inflation rate, while most investor's savings are struggling," he said. "You cannot control the cost buy you can save in a tax advantaged manner to maximize those savings." Glazer advises people to save whatever level theycan through an automatic, regular investment program like a checking or payroll deduction. Bank kid's cash gifts Glazer suggest families consider a family and friends initiative to support college savings. "Birthday money and cash gifts from other life events can be contributed to a college savings plan," he said. "Tell friends and family to forgo gifts during the holidays to contribute to the college fund instead." Stay the course with investments "Don't let short term market noise affect your long term savings goals," Glazer said. "The recent economic and investment market volatility may provide good long term entry points for investors." He said individuals shouldn't consider stopping their contributions to either a retirement or college savings plan based on current events. Look for outside college funding Glazer said there are plenty of scholarships available. However, he cautioned to be wary of any service that charges for scholarship information. "The internet or your local library is good places to start," he said. "Most students fail to apply for scholarships because they assume they will not be eligible. This leaves a smaller applicant pool competing for those available scholarships." Consider your timeline Glazer said time frame is the most important consideration when saving. The amount of savings is the second issue. "If you are saving a lump sum towards education, use a more conservative vehicle. If you contributing monthly, you could consider being more aggressive," he advised. Glazer said gauging the return on your education investment is very simple: a balanced portfolio may have less long-term return, but it will better protect your lump sum contribution. Age base portfolios take away some of the guess work, but they don't work for everyone. "Age based portfolios will begin in a more aggressive asset allocation for your younger children and grow more conservative as the child is closer to attending school," he said.