“Always, for me, the retirement comes first,” says Lindsay, director of financial planning at Covington, La.-based Personal Financial Advisors, who had her first child at 39 and has several clients in their 40s or 50s with young children.
Students can get college scholarships and loans, while retirees don’t have those options for funding their golden years, planners note. Also, well-set parents can tap or borrow against retirement accounts to help pay for college.
“The kindest thing a parent can do for their child is fund their own retirement and let the child pay for their own education,” says certified financial planner (CFP) Rick Kahler, president of Kahler Financial Group in Rapid City. A child would spend two to five times more caring for an elderly parent who didn’t plan for retirement than they would for their own college education, he says.
“There seems to be a societal money script that if you’re a good parent you will fund your child’s education, so I see very few people who come to me that have chosen to fund their retirement over their child’s education,” says Kahler, 56, the father of a 10-year-old and a 14-year-old. “In fact, I can’t think of anybody.”
Kahler tells clients they may be doing their kids a favor to let them work their way through college or pay for half of it. “They may be giving their child a huge gift in focus and self esteem, and that can be a good thing,” he says.
Often, Kahler says, clients write a tuition check, then charge groceries on the credit card. “Unfortunately it’s the rare person that actually saves for their kid’s college education, or that cuts their lifestyle to pay for it,” he says.