Ask Terry Questions College and retirement

College and retirement

By Terry Savage on May 20, 2019 | Financial Planning / Retirement

Hi Terry!
I saw you on wGN this morning –
I have a few problems- my husband doesn’t trust anyone and thinks our money (we hardly have enough) is safest in the bank.
(Where it makes nothing)

We also have an only child, who is 11 1/2 with over 40k in her savings account.
I know we’re wasting time and am desperate for help!

I have Multiple Sclerosis and can no longer work, my husband does have a 401k and pension for the future- which I fear isn’t going to be enough.

He’s 46, and I am 43.
Please help


Terry Says

OK, this requires some financial planning help because you’re making a few mistakes.  But the good thing is that you have some time on your side.  And just so you know, everyone in their 40s is worried that they won’t have enough to retire.  But I can understand your anxiety, given your medical condition.  One thing I want to ask up front: Does your husband have life insurance on his own life — in case something happens to him?  That should be a top priority, since you can’t earn enough money to take care of yourself and your daughter if something happens to him!

Here are a few other thoughts.  And if you want more help, set up a meeting with a trusted fiduciary financial planner (one who promises to put your interests first) by going through  The first meeting should be free, and maybe your husband will be more willing to take these suggestions from them.

  1.  It’s ok to have “money in the bank” as long as you are earning current rates, which should be around 2 %.  If not, you can buy U.S. Treasury bills for 13 or 26  weeks (see this article) — which is lending money to the U.S. Government, the same government that insures your FDIC deposits! Treasury bills are widely considered the safest investment in the world!  You can start with just $100, and get market rates.  Please read the article.
  2. Having money in an UGMA/UTMA (custodial gift to minors) account is the WORST thing you can do if you’re planning to use the money for college. Immediately contact Vanguard or Fidelity (1-800-Vanguard, 1-800-FIDELITY) and ask them to open a 529 college savings account for your daughter, moving the saved money into it.   Money  in a child’s custodial account weighs 5x more heavily against you in the financial aid process.
  3. I hope he is saving the max — at least enough to get the full company match — in his 40l(k) plan.  He should be investing conservatively, but for growth, within  the plan.


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