Should you prioritise your own retirement savings over your children's education fund?

Question

Rich Dad · Accepted Answer

“If the plane’s going down, put your own oxygen mask on first — broke parents don’t fund dreams.”
Let me be blunt: your retirement comes first. Always. Your kids can borrow for college. You cannot borrow for retirement. There is no ‘Retirement Loan Office’ handing out 30-year loans at 5% so you can eat at 75. If you hit 65 without assets, guess who becomes the backup pension plan? Your children.
Here’s the math. If you invest $500 a month from age 30 to 65 at an average 8% return, that grows to roughly $1.1 million. Wait 10 years and start at 40? You’ll need nearly double the monthly contribution to catch up. Time is the real asset. Meanwhile, a child can choose a state school at $25,000 per year instead of a $70,000 private university. They can work part-time. They can apply for scholarships. They can take loans. There are options.
I’ve seen parents dump $200,000 into college funds, then show up at 62 with $180,000 in retirement savings and panic in their eyes. That’s not love — that’s financial illiteracy disguised as sacrifice. Imagine two scenarios: Parent A funds retirement aggressively, builds rental properties, and hits financial independence at 58. Parent B fully funds college but has no passive income and must work until 72. Which parent actually models financial intelligence?
Now, nuance: I’m not saying ignore education. I’m saying build assets first. If you’re maxing out retirement accounts (say $23,000 per year in a 401(k) in 2026 limits, plus IRA contributions) and still have surplus, then fund a 529 plan. Or better yet, build cash-flowing investments that can pay tuition from profits. I’d rather own a small business generating $30,000 a year than lock money into a restricted education account earning 6%.
Counterargument? “But education is an investment!” Sometimes. A STEM degree from a strong university can produce a 10–15% annual return in lifetime earnings. But not all degrees are equal. A $280,000 art history degree with $1.2 million in lifetime earnings versus a $40,000 engineering degree with $3 million earnings? Big difference. Blindly funding college is not the same as funding opportunity.
Your job as a parent is not to eliminate struggle. It’s to model strength. If your retirement is secure — say you’ve built assets that replace 70–80% of your income — then helping with tuition becomes a gift, not a burden.
Fund your future first — because financially free parents raise financially fearless kids.

Poor Dad · Answer

“You can’t study if the lights are off — but you also can’t retire on good intentions.”
This is a painful question, and the honest answer is: retirement should usually come first, but it requires balance and careful planning. Be careful not to swing too far in either direction. Security matters — for you and for your children.
Here’s the reality. The average retiree may spend 20–30 years in retirement. Healthcare alone can cost a 65-year-old couple over $300,000 over their lifetime. If you underfund retirement, you risk becoming financially dependent. That pressure can strain family relationships. I’ve seen parents who paid for elite colleges but later relied on their children for housing. That creates guilt on both sides.
However, education does matter. Data consistently shows college graduates earn roughly $1 million more over a lifetime compared to high school graduates. That’s not trivial. Avoiding student debt can give your child a powerful head start. Graduating debt-free instead of with $40,000 in loans (at 6% interest) could save them $15,000–$20,000 in interest over 10 years. That’s meaningful.
The responsible approach is structured prioritization. First, contribute enough to retirement to capture employer matches — for example, if your employer matches 5% of salary, never leave that free money on the table. Next, aim to save at least 15% of your income toward retirement. Once that baseline is covered, allocate what you reasonably can to a 529 plan. Even $200 per month from birth to age 18 at 6% growth becomes roughly $78,000 — a significant contribution without sacrificing your own stability.
Also, teach children shared responsibility. They can apply for scholarships, attend community college for two years, or work part-time. Education does not require parents to shoulder 100% of the cost. In fact, children who contribute financially often value their education more.
The worst-case scenario is underfunding both — spreading money so thin that neither goal is adequately met. Create a written plan. Review it annually. Adjust as income grows. Stability first, opportunity second.
A secure retirement protects your family long after tuition bills are paid.

Should you prioritise your own retirement savings over your children's education fund?

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