Should You Pay Off Your Child’s College or Fund Your Own Retirement First?
This is one of the most common dilemmas I help families work through—and one of the most emotionally loaded.
Many parents come to me feeling pulled in two directions: “I want to set my child up for success. But I also want to make sure I’m not a burden down the line.”
And when you boil it down, that’s really the heart of the question: Should I use my limited dollars to pay off (or help avoid) my child’s student debt—or make sure I’m investing in my own retirement first?
As a financial advisor, I look at this from both a practical and long-term perspective. And while I’m not a parent myself, I work with many who are—and I’ve seen how tough these tradeoffs can be.
Let’s walk through the core considerations together, with some real-life examples and planning strategies.
Retirement Is a Need. College Is a Gift.
Retirement isn’t optional. At some point, you will no longer work. And unlike college, there are no grants, scholarships, or subsidized loans available to fund your retirement.
I once worked with a couple in their early 50s who had paid out-of-pocket for both of their kids’ undergraduate degrees at private universities. But by the time we sat down, they were just 10–12 years from retirement and significantly behind on their savings.
They felt proud about helping their children graduate debt-free, but incredibly stressed about what that meant for their own future. Their choices became more limited. They learned they needed to work longer than they had originally anticipated, cut back spending dramatically in retirement, and we had even discussed the need to downsize their home.
This isn’t uncommon. And it’s not that they made the “wrong” decision—it’s just that they admittedly made it without fully understanding the ripple effects.
Your Children Have Time on Their Side
A 19-year-old with student debt has decades to pay it off, increase their income, and recover from early financial missteps. But a 59-year-old with inadequate retirement savings has far less time to make up ground.
Plus, when I run the math with clients, student loan debt (if managed carefully) can potentially be less expensive than trying to play catch-up with retirement later on. Let’s say your child graduates with $40,000 in federal student loans. That’s not insignificant—but if they go into a solid industry, live modestly, and make consistent payments, that’s manageable.
Meanwhile, investing $40,000 in a retirement account today (especially in your 40s or 50s) could grow substantially over the next 15–25 years, thanks to compounding.
Prioritizing Retirement Helps Protect Your Child Later
Here’s another scenario I’ve seen play out: A parent sacrifices retirement savings to help their child with college. Twenty years later, they can’t afford healthcare premiums or decent housing—and that same child is now sending money back home to support their aging parent.
Most parents I talk to would rather their kids graduate with some loans than feel responsible for or even burdened by their care later. Prioritizing your own financial security now is one of the most generous things you can do for your child’s future self. I hear this reaffirmed by the majority of my clients time and time again.
But What If You Can Do Both?
It’s not always an either/or decision. For many families, it’s about striking the right balance.
If you’ve consistently saved for retirement and are on track to meet your goals, you may absolutely choose to help with tuition or loan payments. Some clients of mine use bonus income, RSU vesting, or windfalls from an inheritance to make lump-sum gifts toward college costs without touching retirement.
Others get creative. One client set up a matching system and said: “For every dollar my daughter saves from her part-time job or scholarship funds, I’ll match it up to $10,000.” This approach gave her daughter skin in the game and helped them both feel good about contributing. I thought that was a pretty good idea and a great life lesson for her daughter as well.
What About Paying Off Existing Student Loans?
Let’s say your child has already graduated—and you’re considering helping them pay down their debt.
Here are a few questions I walk through with clients before they write that check:
Have you already maxed out your 401(k) or IRA contributions this year?
Do you have at least 6 months of emergency savings set aside?
Are you on track for retirement—or do you feel behind?
Will helping your child set a precedent for future financial support for them or other children/dependents you have?
Are your children able (and willing) to manage the payments themselves?
One couple I work with decided to pay off half their daughter’s loans once she had made 12 consecutive on-time payments. That way, they helped her without removing the responsibility or discipline of repayment. It also gave them time to monitor her career stability and financial habits.
Bottom Line: Plan With Your Head AND Your Heart
I know how deeply people care about their kids. That’s why this decision is never purely financial.
But emotions can cloud the long-term picture and cause people to make missteps that affect them in the long-run. That’s where a financial plan comes in. You don’t have to guess or go at it alone. There’s almost always a middle ground, and a thoughtful strategy that reflects your goals, values, and reality.
If this is a decision you’re wrestling with, I’d be happy to help you think it through. Because when you plan ahead, you give both yourself and your children a stronger foundation for the future.
Feel free to schedule a complimentary financial consultation with me today: https://calendly.com/winstone-wealth-partners/financial-consultation-with-lauren-smith