Saving For College or Retirement: Which Should You Prioritize? (9 Couples Tell Us Their Decisions And Why)

Which one is more important: saving for retirement to secure your financial future, or saving for college to secure your child’s education? 9 couples share the reasoning behind their decision.

When it comes to family finances, married couples are often overwhelmed when deciding what to prioritize. They’re torn between saving for retirement and focusing on their kids’ college funds.

Some couples have differing opinions; some consult a financial advisor, while others just wing it.

This article shares the experience of 9 couples and the reasons behind their decision.

If you’re in a similar situation, it may help to read about other couples’ experience:

1. Start Early, Don’t Wait ‘till You’re Married

For Joan Fradella, a family mediator certified by the Supreme Court of Florida says, “saving for retirement should begin on day one of your first job. College savings should begin as soon as your first child is born”

The best way to go about this, she added, is for you to “contribute simultaneously to multiple savings accounts.” She emphasized the need to give equal attention to both purposes. “If you fall behind in college savings, kick it up a notch, but not by reducing your retirement contributions.”

Even if you can’t pay 100% of your child’s tuition, he or she can apply for a scholarship or get a loan for the difference. But no bank will allow you to loan money for your entire retirement.

2. Deal with What You can Control

If you ask IT professional Joann Perahia, retirement is a more urgent concern than a college fund. She says, “Financial planners tell you to save for retirement, and I agree.” Her children paid for their college education.

On the other hand, one of her well-to-do friends set aside $200, 000 in a 529 account for their only child. But the kid didn’t want to attend college. “I’m not sure what happens to that money,” she admits. Years ago, you could only use it for educational purposes. But now, some states allow you to take it out with a tax penalty.

Your children’s decisions, once they come of age, are often beyond your control. So save for their education, but prepare for the consequences of them not using the money.

3. Work with What You Have

Personal finance writer Julie Rains admits it would have been easy to set up 529 accounts for her two sons. But she wouldn’t have been able to fund them back then. “There are great, inexpensive options now but that wasn’t the case when my kids were younger,” she explained.

Rains’ family saved in a variety of ways. They deposited money into retirement accounts, regular accounts, and college accounts. Both of her sons are in college now. And because their mortgage is fully paid, she has more funds to set aside for their tuition.

Putting more money into a retirement account, versus a regular account, can also affect your children’s chance of getting a scholarship. “Many scholarships are based on your financial needs, but homes and retirement accounts are exempt”, says Rains. So putting your funds in a 401k or similar retirement account can ‘shield’ it from the calculations of universities, and companies granting scholarships.

Rain admits, “If I could do things over again, I’d definitely be more aggressive about putting money into my retirement account and college-savings accounts.”

4. Don’t Rely on Scholarship and Financial Aids, Even if You Have One

An anonymous parent whose child got a college scholarship gave me a good reminder about the limits of financial aid.

He said, “My kid was an honor student and he did all the sports, varsity, and volunteering stuff. But we didn’t get anything, apart from a small grant that gets even smaller every year.” Besides, very few scholarship options cover room and board, so you still need funds for that.

5. Consider Whether You’ll Enjoy Working Past Retirement

“This is a question me and my wife have addressed personally, and one I am asked about often professionally”, says Certified Financial Planner Jeff Weeks.

If you save up for retirement more than you save up for a college fund, it doesn’t mean you love your kids less.  In fact, you’re helping your kids lead their own lives by ensuring that you can take care of yourself even after you stopped working.

Weeks explained, “If we don’t have enough to retire when the time comes, our only choices are to continue working, or hope the kids have good enough jobs to support us.”  That’s a huge burden for your kids, especially if it happens while they’re still paying for their own student loans.

6. Learn to Let Go

Matt Connell, CEO and a co-founder of the Yellow Brick parenting community, says “most parents are extremely worried about this topic.” He likens this dilemma to an emergency on the plane.

“People need to put their oxygen mask on first and then secure their kids,” he says.

Connell and his wife are both self-employed, and raising two children. “My wife and I talked about this a lot. We’ve researched the topic at length, and after several discussions we’ve come to decide that saving for retirement is much more important for us,” says Connell.

His decision isn’t based on mere pros and cons, but on the research they did. Connell explains, “Federal funds are getting tighter and student loans are getting knocked quite a bit because of the burden they leave on graduates.” Students can find available funds, if they look hard enough.

He adds, “I know a few parents that have pieced together entire tuitions through small scholarships that are obscure and go unnoticed. Retirement, on the other hand, is quite the opposite. Social Security isn’t as reliable as before.”

7. Choose Retirement, it Might Come Earlier than You Expected

IT trainer and documentation specialist Janet M. Nast is thankful that she and her husband invested in their retirement.

“There’s no guarantee that your kids will grow up and be in the financial position to support you, but there’s a guarantee that you’ll retire eventually,” says Nast.

 “My retirement came much sooner than I expected because I recently lost my job at the ripe old age of 57,” she continues.

Nast admits it was lucky her husband is already drawing on his Social Security.  “Thank goodness he saved! If necessary, I too can draw on my savings in about a year and a half”, she continues. This is why saving for retirement, even if it’s just your social security, is important. It’s like an emergency funds, you won’t know its importance until you desperately need it.

Although Nast wishes she could have spared her daughter from taking out a student loan, she’s glad neither of her kids “has the burden or obligation of supporting her and her husband.”

8. Consider it the Best Life Lesson You Can Give Your Kids

Larry Marshall used student loans to fund his own education. “It made me more responsible because I had to learn that I didn’t like debt. I had to work hard to pay them off,” he says.

“The biggest disadvantage of saving for your own retirement is that your kids could incur debt to get their degree,” says Marshall. But that could also be a blessing in disguise.

It’s a good way to teach them the value of resourcefulness, so they can find their own scholarships and aides. It’s also a good demonstration of the work you need to put in to earn a good living.

9. It’s Not their Obligation to Give Back

“I want to cover my bases,” says Jay Vargas, a customer service representative and a married father of one. He wants to save money for retirement and his son’s college fund.

He explains, “You shouldn’t rely on your kids in the future. It’s your obligation to nurture them but not their obligation to give back to you.”

Figure Out What Works for You

Despite all these insights, in the end, the decision still lies in your hands.

Whatever you decide on, whether to prioritize one or the other, or save for both, it’s best to just start saving consistently. Having money to fall back on when the going gets tough is always a good thing.

About the Author

Charley Mendoza is a freelance writer covering business, personal finance, careers, and personal development. Check out her website at


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