Older parents, younger children

Many people are waiting until later in life to start a family. A new baby can have much bigger financial implications if you're in your late 30s or 40s.
If you're starting a family at a later age, you've got less time before your retirement. The good news is that you're likely to be more established in your career with more disposable income.
Insurance for starting a family
Be sure your family is protected from any disruptions to your income, starting with life insurance. Your policy will not be enough.
The right amount of coverage varies from one family to the next, but in general, a life insurance policy should cover several years of your salary, plus enough to pay off all debts (including a mortgage), and cover some child-care expenses (including college).
Find out how much additional life insurance you might need.
Make sure you also have some kind of disability income insurance, along with long-term care insurance for when you get older.
Many jobs offer these policies as a part of their benefits package. The decision to enroll should be automatic.
If you're self-employed, the stakes are even greater.
Regarding long-term care, it's possible that your greatest healthcare needs, and expenses, could come before your kids are in the workforce.
Have an estate plan in place

Next, make sure you've got a clear estate plan in place. This means a will that stipulates guardians for your children and how your assets are to be distributed if something happens to you.

Because your children may be too young to take over your assets directly, you should consider setting up a trust in their name. Be sure to designate a responsible person—which may be a different person than their guardian—to oversee the trust until they come of age.

If you can't take care of your kids because of an illness or accident, you'll need to identify the person who can serve as their guardian.
Save money for retirement

Perhaps the biggest challenge with having children later in life is saving money for two big goals—their college and your retirement—at the same time.

There are no universally applicable guidelines. In general, you should make your retirement savings the number-one priority.  Remember, you can borrow for college, but not for retirement.
Saving for retirement can be done through your employer plan, IRA contributions and other investments.
Save for college

One college savings option is a 529 plan, which lets you save for a family member's education. Any earnings can grow tax-free, while many states also let residents deduct their contributions against income, giving them a break on their state tax bill.

It's worth noting that this need not be an either/or decision—many parents opt to max out their retirement contribution first, and then save whatever else they can through a 529 college savings plan.

The big picture

With deliberate planning, clear priorities, and some help from TIAA, you can take care of your children financially while making sure you have a sound plan to take care of yourself and your spouse.

The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results.

Life insurance is issued by TIAA-CREF Life Insurance Company, New York, NY.  Each of the foregoing is solely responsible for its own financial condition and contractual obligations.

Investments in a state 529 college savings plan are neither insured nor guaranteed and there is risk of investment loss. TIAA-CREF Tuition Financing, Inc., manages several state 529 college savings plans. Before investing, check your state's website for information about favorable state tax benefits that are only available if you invest in that state’s plan.

Consider the investment objectives, risks, charges and expenses before investing in a state 529 college savings plan. Read the Disclosure Booklet containing this and other information carefully. Investments in a state 529 college savings plan are neither insured nor guaranteed and there is risk of investment loss.


Discover more


How TIAA can work with you

Find out how we can help you make informed choices with your money.


Our IRAs offer tax advantages and help you plan for the retirement you want.

Give your emergency fund a boost

Consider a high-yield bank savings account.