Parent priorities: Tips on how to save for retirement AND your kid's college

KANSAS CITY, Mo. - While many people in their late 20's are still paying off their college loans, one Lee's Summit couple is already paying it forward. 

Daniel and Emily Morris want to start saving for their daughter's education today.  Even though she is just 2 weeks old.

But they also want to continue building their retirement fund and possibly pay off their home in the next five to seven years.

Emily is a CPA and Daniel an Internal Auditor.  But for a third opinion, they met with financial adviser Eric Jones with Stepp & Rothwell  in Overland Park.

Jones says saving for retirement is number one. 

"There are a lot of options available for college - student loans, scholarships, grandparents.  (With) retirement, you are on your own."

Because the couple has a low-interest rate on their mortgage, Jones is urging the couple to focus on saving money instead of paying off their house in the next several years.

Jones said a good rule of thumb when it comes to retirement is to save at least 10 percent of your annual salary.

He's advising both Daniel and Emily to contribute to a ROTH IRA, where you money grows tax free, a joint investment account and their company's 401K.

As far as Julia's college fund, he calculated $5,000 in savings for the next 18 years.  Jones wants the couple to put half of that money into a 529 college savings fund and the other into a joint investment account.

If you set up a 529 account in Missouri, there is a maximum match of up to $500 per year.

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