5 Reasons to Put Your Retirement Plans Ahead of Your Children’s College

5 Reasons to Put Your Retirement Plans Ahead of your Children's CollegeI recently spoke with a single mom who was planning to mortgage her paid for house in order to ease her children’s college burdens.

Her logic?

“I just can’t let them accumulate all of those student loans.  What kind of a mother would?”

I discouraged her decision, but she steadfastly believed that good parenting is sacrificial parenting, even if she endangers her own retirement.

Why did I discourage her?

Because I believe parents should make their retirement a higher priority than their child’s college.

Furthermore, I believe doing so makes one a good … not bad parent.

Here are five reasons why:

1. You have only one chance to fund your retirement.

Once you reach retirement age, you don’t get a do-over.  Whatever you have accumulated is what it is.  However, children have many ways to fund their college.  Here are a few:

  • Attend community college for the first two years.  It is almost free education!
  • Attend a state (instead of private) school the last two years.
  • Apply for scholarships.  Lots of them!
  • Look for companies which offer co-op work/tuition programs.
  • Work.  All summer and part time during school year.
  • Consider joining a branch of the military or the National Guard.  The G.I. bill is still in effect.
  • Delay college.  It might be the right thing, but maybe not now.

2. You will force your children to set their own priorities.

Are they going to college because it is paid for or because they truly want to?  By forcing this issue, you are bringing out what is truly important to your child.  That is a good thing!  If she chooses college, she will clearly understand that the burden of payment is on her shoulders. Who knows, she might choose a high paying job without a degree!

3. Success is not guaranteed by a piece of paper.

Certainly, a college diploma is important, but it is too often considered as a magic route to a successful career.  Yes, a diploma will open doors, but once any graduate has that first job, his work ethics, integrity and people skills will determine how far he can advance.

4. Your child might not graduate.

It happens all of the time and there is no guarantee that your child will be different.  Jeopardizing your retirement on the risk that Junior might or might not graduate is a poor bet.

5. Your child may need to support you in your senior years.

If, by putting your child’s college ahead of your retirement, your sunset years turn out leaner than you ever imagined, your children may need to care for you.  I realize that children SHOULD want to help their senior citizen parents, but the irony is this:  your zeal to be a good parent may have created the circumstances which require your child’s help.

Please do not imply from this post that I don’t believe parents should ever help their children pay for their college.  We helped our children and I am glad we did.  My point is to make your retirement planning a higher priority than your children’s college.  Once that retirement planning is in place, you should feel free to use any additional cash flow to help your children with their advanced education.

Someday you will look back at this time in your life and be glad that you set your priorities, made a plan, and stuck with it.

What are your convictions when it comes to paying for your child to go to college? Would you give up your retirement plan so that your child can experience college? Do you think it’s wrong to do so? Everyone sets different priorities. Meet us in the comments, we’d love to hear from you!

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  1. Debt Free Divas

    I agree 100%. Great advice!

    • Linda

      I agree. We show mercy. And grace to our. Children. But. Its. No guarantee. They. Will do. The same. At all. Times. We. Must depend. On God. With. Retirement. Plan. Or. Not

  2. Don

    Great post!! I agree 100%. I think many parents fail to analyze the possibility that by paying for/helping out with college costs and not having enough for retirement, that may in fact burden the child more because they will then be forced to support the parent. There could easily be financial and emotional stress in this circumstance. I would suggest to first let the child find every avenue to pay for college first, then have the parents assist if need be. In my case, I paid for college and took out loans. I am doing OK, and my parents are as well. Now that they know they are going to “make it” in retirement, they have given me small sums of money to help pay off my loans. They are still helping, but not sacrificing their livelihood to do so.

    • Joe Plemon

      Don — Good for you, and your parents. They sound very wise to me…helping but not sacrificing their livelihood to do so.

  3. KC @ PsychoMoney

    Totally agree. Kids need to learn to take care of themselves. I have seen so many college graduates not have to worry about anything until after graduation, then without mom and dads help they fall on their faces.

  4. Joe Plemon

    Accountability in college age young adults is critical. If they haven’t learned it before, this is the time. I remember clearly when I went away to college, and how I felt the weight of responsibility like I had never felt before. Of course, knowing that I was footing the bill had a lot do to with that feeling.

  5. Joe Plemon

    Good point about how kids can become so dependent on mom and dad that, even after college, they are not ready to be on their own. Being responsible for their own college prepares them for life after college.

  6. Joe Plemon

    Wayne — You make my point. The fact that you don’t make very much money is all the more reason to set aside every penny you can for retirement. Good job on the $200/month! Believe me: if your kids want to go to college badly enough, they will figure out how to do so. In the meantime, I will quote your words of wisdom: “But I know in the end it is the right thing to do. God will provide.” Amen!

  7. Joe Plemon

    Abre — I wonder, statistically, how many children whose senior citizen parents have needs will help those parents. It is a different discussion, but I, like you, am saddened when children who are able will not step up to help their parents.

    • JPA

      It’s not a direct answer to your question, but some of the below data may provide some insight:

      – 1 out of every 8 Americans ages 40 – 60 are both raising a child and caring for a parent
      – 9% of that group is a full-time caregiver providing $1,000 a yr. and/or 500 hrs of care. 80% of this group provides 23 hrs. of support a week to a parent
      – these family care givers also have kids living with them (46%) and work part or full time (64%). They’re all over the place!

      So there’s a group of people out there who are already doing it!

  8. Minda

    Retirement should defiantly come first. There just aren’t any good alternative to savings. Of course savings is the best way to pay for college too but there are also other options like you listed.

    It is very important to check with the college you are transferring to BEFORE you start community college. I’ve known people that went to community college for two years and then had to go to their next school for three or four years. It happens especially in engineering.

    http://www.finaid.org has some good calculator for college funding.

    • Joe Plemon

      Great point about knowing what will and will not transfer from a community college. I was fortunate in that I did not check ahead of time (actually I had no clue when I started community college where I would transfer to), but nearly all of my credits transferred. By the way, I am a civil engineer.

    • Minda

      So glade it worked out for you. In SD we don’t even have community colleges anymore. Instead we have university centers in the larger cities. All the public universities can offer classes there. That way you always know what you are taking will transfer. It only saves you money if your family lives in one of those cities and they’ll let you keep living with them. I think more states should adopt this system.

  9. Greg VT

    Good post – many of the same points are brought out in Zac Bissonette’s book “Debt Free U”.

    I think it should also be noted that just because mom and dad are cutting their retirement, borrowing against it, or worst yet, cashing out their 401Ks, that does not mean saddling the child with student loans. It also doesn’t mean that a parent can’t / shouldn’t provide any assistance. For many (but not everyone) there are choices. Is my desire to own a new SUV, have a cable subscription, or a high end cell phone with an expensive data plan a higher priority than helping my child graduate from college debt free.

    • Greg VT

      I mean’t to say just because mom and dad AREN’T cutting their retirement

    • Joe Plemon

      Agreed. Students who do not receive parental support for college are NOT doomed to huge student loan debt. In fact, I believe the opposite is true. Why? Because a child who sees his parents being smart with money (not sacrificing their retirement to pay for kid’s college) will be more apt to be smart with money himself…thus, less debt.

    • Minda

      I agree. Once you cover the basics, how you spent the rest of your money depends on what is important to you. It’s like that saying goes, “If it is important you will find a way. If not you will find an excuse.” It’s not an all or nothing deal either. Any amount helps when you are in college.

  10. I agree 100% I wrote a post about this a while back in response to some friends suggesting that my husband and I set up college funds before we start funding our retirement accounts. Our kids can work hard and either get a scholarship, work their way through instead of using our hard earned money now to fund something inspite of the reasons mentioned above.

    Wonderful post for those putting their retirement on the back burner. If there’s any indication of how much that piece of paper is worth, look at the current educational crisis.

    • Joe Plemon

      Ginger — Thanks! Just curious: how did your friends respond to your blog post?

    • They didn’t agree with it but in the end you can get a loan for college but you can’t get one for retirement. We come from a culture where college is mandatory but times have since changed. Now I value entrepreneurship more than a college education as that piece of paper doesn’t quite open as many doors as we thought it would.

  11. Brent Pittman

    Wayne, I see you have a website, keep it up. Seems you are modeling how to work despite your circumstances. I’m sure they’ve learned how to work hard from you. Also check out book: “Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents” Good job on saving for your later years.

  12. Paula @ Afford Anything

    The best way to summarize it:

    Your kids can get a college loan. You can’t get a retirement loan.


    Your kids have the rest of their lives to grow and accumulate wealth. You have a limited amount of time to conserve your wealth.

    • Joe Plemon

      I agree…that IS the best way to summarize it!

  13. JPA

    Here’s the MATH:

    According to the WSJ and Center For Retirement Research at Boston College the average person between the ages of 55 and 64 should have:

    $320,000 in their 401k/IRA (if they earned a modest income)

    What do people actually have?


    So you will likely fall along this path as well (401k participation rates for the next generation aren’t any better than the current retirement generation – seems we don’t learn).

    Who will pay for your retirement if you fail to plan? The Government? Pick up a newspaper and take a guess where social programs are going in the next 20 years…

    In the end it will be your family that helps your financially. Maybe not directly your kids, but someone will surely suffer.

    Here’s the PRACTICAL SIDE:

    Most parents will fund their college kids education at the expense of retirement. Its a fact. Yes, from a mathematical standpoint they shouldn’t…but they still do.

    Short term needs almost always trump long-term financial goals.

    So, what this article lacks is specific ways parents can balance both goals:

    1. Exhaust the scholarship path – looked at it already? Really? Have you? Have you applied to hundreds of scholarships. Look here:

    2. Friends and Family – in my experience, Aunts, Uncle and Grandparents are willing to help out financially with two things: health costs and education costs. Maybe they can pitch in a bit.

    3. Lower Cost Schools – what is the true value of going to a higher brand institution vs. a state school? I personally think its worth it, but it depends on what your child wants to do and what schools are available in your state.

    4. Working In College – This can be a good way to pay off loans faster and to give your kid a sense of responsibility and ownership

    Help your kids. For sure. They will benefit wildly from their education. But put your considerable brain power to finding out what levers your can pull to make it financially worthwhile.

    • Joe Plemon

      JPA — Thanks for the well thought out response. I agree that, practically speaking, many parents will jeopardize their own retirement in order to help their children with college expenses. My point in this post is to challenge parents to think it through. They CAN plan for retirement and help their children at the same time, but (in my opinion) the college help should only come from funds above what they need to be investing for retirement.

  14. Joe Plemon

    mabu — I agree that parents should not bring children into the world if they cannot provide for them. However, I believe that challenging an 18 year old to figure out his own future does not fall into the category of not providing for them. We instilled in our children the desire and responsibility to become independent once they left the nest. Many reputable authorities, including Dave Ramsey, Henry McCloud and John Townsend agree with this thinking. Proverbs 22:6 says, “Train up a child in the way he should go and when he is old he will not depart from it.”

  15. Josh

    Another option is “credit-by-examination” taking CLEP or DSST tests. Military members will be familiar with these terms, but anyone can take them. CLEP tests are administered by the College Board (creators of the SAT exam & Advanced Placement high school program).

    Earning college credit this way tests you on the knowledge you already know. Think of it as “Self Study College.” If you get a high enough score you earn 1 or 2 semesters worth of college credit for English 101 & 102 as an example.

  16. Bernie

    Funny thing is, If your children pay for their own Education. They actually attend classes..
    W.O.R.K. never killed anyone, Grandma always said “Work is a sure fired money making scheme”.

  17. Angela

    100% agree with this article! I’m sure gonna try to help my kids pay for university, but not before I’ve worked out how I’m going to pay for our retirement. My parents didn’t help me, and I still went to university and paid for it myself. I’m trying to teach them now (ages 16, 14 & 9) that you don’t go into debt to do anything and never get a credit card so I hope they will follow my advice when they are adults including paying for school fees with cash.

    • Lauren (SeedTime Editor)

      That’s great, Angela!

  18. Rich

    Wake up call for me, thank you Joe and Seedtime! I have been in denial about a lot and retirement is now important. I am making it a priority. My plan is cut back on entertainment and save more.

  19. Katherineo Hooks

    We paid for a small part of our children’s education and told them they would have to work to pay for the rest. They did. Our son went on to earn two master’s degrees and just completed his Ph D. Our daughter majored iin accounting and earned her CPA
    Later she discovered that she hated accounting so now she’s back in school part-time and working part-time. We paid for these first two classes. She now has no debt except utilities and get house payment and loving ecpenses, which she’s meeting as she continues get education. We also paid for our own education, and my husband is a Oh.D. So you see, we think the best way for us to help out children become educated is to supplement their earnings with an amount while making them work to pay for their own education. It worked out well for our family.

  20. Njoki Wanjohi

    your advice is very useful. Children should take some level of responsibility for their college education this help the kids as they settle in their career because they will have a good foundation on being responsible. Retirement planning is crucial because after retirement one has few sources of income.and the kids will have all the energy and opportunities .

  21. Rita Stewart

    This is exactly what we did!

    We focused on our retirement and as parents we were very intentional about ensuring our daughter had a very strong foundation in education, cultural experiences and relationships.

    She was positioned for scholarships and we have our retirement funds in place!