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BUSINESS Friday 9 November 2018
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Do your kids a favor: Pick retirement savings over tuition

By KEVIN VOIGT you in your later years.
Associated Press "We see clients want to
Most financial planners help their kids through col-
advise never tapping re- lege at the expense of
tirement savings to pay for their own retirement, and
your kid's education. Even we always advise against
as college costs climb, it," says Matt Ahrens, a fi-
there are still options to bor- nancial advisor at Integrity
row that cash, whereas it's Advisory in Overland Park,
often noted that you can't Kansas. "Parents have to
borrow for retirement. understand that sacrificing
Yet about one-third of to help their kids through
Americans with kids under college may only put more
18 say they plan to use re- stress on their children
tirement savings or "could when they see their par-
use if needed" to help pay ents struggling financially in
for their children's educa- retirement."
tion, according to a recent A more immediate blow:
survey by Sallie Mae, one Using your retirement funds
of the nation's largest stu- This June 15, 2018, file photo shows U.S. currency on a counter in East Derry, N.H. could hurt your child's abil-
dent loan lenders. Associated Press ity to qualify for student aid.
The good news for retire- Why? The cash is consid-
ment savings is that num- tax-advantaged employer sponsored retirement ac- "You can withdraw any ered "ordinary income" and
ber is declining — in the retirement account like a counts can grow tax-free. Roth IRA contributions that may put your total wages
2016 edition of Sallie Mae's 401(k) can hurt you in sev- ?Less benefit from com- you've made without pen- for the year beyond what
survey, 39 percent of par- eral ways: pounding. Early withdraw- alty," says Crystal Wipper- qualifies for assistance.
ents said they planned or ?A 10 percent tax penalty als will erode your portfo- furth, a certified financial Because retirement ac-
may use retirement savings on early withdrawals below lio's growth potential. planner with Bronfman counts aren't counted
as a last resort to fund their age 59½. But if you're going to tap Rothschild in Madison, Wis- when considering if a fam-
children's education. ?A potentially bigger tax into your retirement sav- consin. "This is not ideal, ily economically qualifies,
More parents are now bill the year of withdrawal ings, experts say the "least because it reduces your re- "funding your 401(k) or
thinking twice about using as the money you withdraw worst" option is to fund a tirement savings, but it is an 403(b) is an advantage for
retirement savings to fund is counted as income. Roth IRA . Unlike qualifying option." college financial aid," says
college dreams, and here's ?Loss of tax-free growth contributions to a 401(k) IT COULD HURT YOUR KIDS, Kimberly J. Howard, a certi-
why their hesitation is war- of your savings. Unlike tax- or traditional IRA, Roth IRA TOO fied financial planner with
ranted. able investment accounts, contributions aren't tax-ex- Tapping your retirement KJH Financial Services in
LOST RETIREMENT SAVINGS where you may have to empt. But as a result, there savings can boomerang to Newton, Massachusetts.
COULD HURT YOU pay the IRS annually for are also fewer restrictions hurt your kids if they need Cash them out, and that
Paying for school from a capital gains, employer- on early withdrawals. to provide financial help for exclusion goes away.q

Nissan sees profit dip as sales fall, offsetting cost cuts

By YURI KAGEYAMA quarterly vehicle sales fell in city of Yokohama. Cost-
TOKYO (AP) — Japanese North America and Europe, cutting efforts were going
automaker Nissan reported but rose in China, while well, but research spending
Thursday an 8 percent fall in they held relatively steady was on the rise, it said.
profit for the latest quarter in Japan, compared to last Karube was asked
as declining sales offset the year. repeatedly about his
benefits of cost cuts. He told reporters Nissan views on the U.S. midterm
Nissan Motor Co.'s July- was working hard to restore elections and what that
September profit totaled profitability in the key U.S. meant for trade and other
130.4 billion yen ($1.1 billion) market. The rising cost of policies affecting Nissan, This June 14, 2018, file photo shows a Nissan logo at the auto-
maker's showroom in Tokyo.
Thursday, down from 141.6 raw materials also eroded but he acknowledged he Associated Press
billion yen the same period earnings, he said. had no idea.
a year earlier. Tariffs on steel, aluminum "It just happened yesterday, "It is still unclear how the
Quarterly sales dipped and other raw materials and it is today," he said. situation may change."q
nearly 3 percent to 2.82 announced by President
trillion yen ($24.8 billion). Donald Trump have had
Nissan, which makes the some negative effect, but
March subcompact, Leaf they were only a small part
electric car and Infiniti of the overall rising cost
luxury models, stuck to its of raw materials, which
forecast for the fiscal year dented profitability, Karube
through March for a 500 said.
billion yen ($4.4 billion) The effect of some
profit on 12 trillion yen ($106 unfavorable currency
billion) sales. exchange rates in
The company's chief emerging markets also
financial officer, Hiroshi hurt earnings, according
Karube, said Nissan's to Nissan, based in the port