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Mellody Hobson talks about common money mistakes people make in their middle ages in today’s “Money Mondays” segment.

I know no one really likes to identify themselves as middle aged, so I’m not pointing any fingers! But money advice tends to focus on young people and all the financial pitfalls they should avoid—and that’s great because we need to teach our kids about money. But the truth is that the stakes are even higher for older people. For one thing, bad financial habits are more ingrained and harder to break. Plus, the middle aged set has less years left in the workforce and less time to save until retirement. The stark reality is that financial missteps in middle age can have dire consequences down the line, and sometimes there’s just not enough time to right to ship.

Wisdom doesn’t necessarily accompany age when it comes to money, it seems. Last week I warned young people about cashing out their 401(k) plans when they switch jobs. But get this: People in their 40s and 50s are making the mistake of borrowing from their 401(k) plans, typically to pay for their kids’ college educations. It’s no wonder why—college costs are rising by at least twice the inflation rate every year. The College Board just reported the average price for tuition and fees at a public four-year school as nearly $9,000, and that figure more than doubles if you add on room and board. If you want to attend that same public four-year school as an out-of-state student, tuition more than triples from $9,000 to $22,000, and it’s another $9,000 a year for room and board.

No one wants their child to come out of college saddled with debt, but borrowing against your 401(k) is not the lesser of two evils. There’s a fundamental philosophy here that needs to change: A 401(k) plan is a savings vehicle, NOT a bank account.

So paying for your kids’ education shouldn’t derail your retirement?

And I’ll say it again. Data released by the Federal Reserve Bank of New York last year shows that middle-aged Americans are actually the age group struggling the most with student loan payments. Not only has the number of middle-aged Americans in their 50s with student loans doubled since 2005, the delinquency rate (90 days or more without payment) for borrowers ages 40 to 49 was 11.9%, compared to a delinquency rate of 8.7% for borrowers of all ages.

It’s true that some of those over-40 debtors are still paying off their own loans from college, but data analysts agree that many are actually parents who have taken out student loans to help fund their children’s education.

In fact, the federal PLUS program, which allows parents to take out loans for their kids to help pay education expenses not covered by other financial aid, is among the fastest-growing of the government’s education loan programs.

Middle Aged Money Mistakes  was originally published on blackamericaweb.com

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