Paying for College Without Ruining Your Retirement

Why parents should start with retirement, not tuition

The Moment the Room Gets Quiet

There is a moment during our workshops when the room gets very quiet.

Up until that point, we’ve been talking about colleges, financial aid, strategies, and how the system works. Parents are taking notes, asking questions, and thinking about their kids.

Then we start talking about retirement.

And the energy in the room changes.

Parents shift in their seats a little. They look at their spouse. And I can almost see the thought going through their heads:

A few days later, when we meet with those same parents, they often say something like:

Because at that point, the conversation isn’t really just about college anymore.

It’s about you.

The Unspoken Assumption Parents Make

Most parents I meet are hardworking, responsible people who have spent their entire lives trying to do the right thing.

They saved. They worked hard. They sacrificed. They tried to give their kids opportunities they didn’t have.

So when their child gets into a great college, the automatic reaction is often:

It’s admirable.

But it can also be very expensive.

Because many families make sacrifices before they run the numbers.

They assume they need to work longer, drain savings, sell assets, or delay retirement.

And sometimes, they don’t actually need to do any of those things.

They just needed a better plan.

The System Is Designed So Families Usually Pay Something

There is something important to understand about the college funding system:

Even with financial aid. Even with scholarships. Even with a low Student Aid Index.

So the question is usually not:

Will we pay?

The real question is:

How will we pay?

The Three Ways to Pay for College

When you simplify everything, there are really only three ways to pay for college:

• Income — today’s money
• Assets — tomorrow’s money
• Borrowing — future money

Most families are comfortable with the first, nervous about the second, and completely opposed to the third.

But the truth is this: any of these three can be the wrong choice if it damages your long-term financial future.

Start With the End in Mind

There’s a principle from Stephen Covey that I love:

If you use a GPS, you don’t start driving and hope you end up in the right place. You enter the destination first.

When it comes to college planning, most families set the destination as:

“Pay for college.”

But that’s not the real destination.

The real destination is retirement.

Questions we should really be asking first:

• ✔️ When do you want to retire?
• ✔️ How much money do you need?
• ✔️ What happens if you spend heavily from assets?
• ✔️ What happens if you borrow instead?
• ✔️ What happens if you keep working longer than you wanted to?

You don’t know the best way to pay for college until you understand what each option does to your retirement.

The Biggest Mistake We See

One of the biggest mistakes we see is parents pulling money out of retirement accounts to pay for college.

On the surface, it feels responsible. It’s your money. You want to avoid loans. You want to help your child.

But what people often miss is this:

Let’s say a family pulls out $30,000 per year for four years to help cover college costs. That’s $120,000 total.

But the true cost is not just the $120,000 that left the account. The real cost is the future growth that money no longer has a chance to earn.

If that same $120,000 could have remained invested at a hypothetical 6% annual return, here is roughly what it could grow to over time:

That is why retirement withdrawals can quietly become one of the most expensive ways to pay for college.

A Tired Teacher

A few years ago, I met with a teacher and her husband. They had one child with an ambitious college list and the grades to get into those schools.

One of the first things she told us was that she had been teaching for 30 years and was tired.

So why was she planning to keep working?

To pay for college.

She assumed she needed to work another five years while her son finished high school and college.

After we ran the numbers, looked at retirement, assets, and college strategy, we met with them to review the results.

One of my favorite moments in this job is getting to say something like this:

Once we looked at the full picture, the answer was not “sacrifice more.” The answer was “use a better strategy.”

Her retirement actually lowered income enough to improve aid eligibility, and with the right school and asset strategy, the entire picture changed.

A Career Firefighter

We also worked with a career firefighter who thought he would need to stay on the job until his daughter finished college.

When we first met, he was on medical leave after surgery for a job-related injury.

We analyzed retirement, assets, and the school list, and the final strategy used a mix of all three ways to pay: some from income, some from assets, and some borrowing.

The result?

That wasn’t just a financial win.

It was relief for him, and relief for his family.

College should not cost you your happiness, your health, or your safety.

A Mom With Rental Properties

Another example surprised even me.

I worked with a mom in her late 50s who owned several rental properties and was the primary breadwinner while her husband dealt with health issues.

She had a modest 529 plan and substantial real estate equity.

I assumed the answer would be straightforward: use the 529, sell a property, and pay for college.

But once the analysis was done, the best answer was something very different.

The strongest long-term strategy was to use the 529 and borrow the rest.

Why?

Because in her case, the retirement difference between one strategy and another created a swing of over seven figures over time.

That experience reinforced something important:

You Can Finance College. You Cannot Finance Retirement

Dominic says this all the time, and he’s right:

There are loans for college. Loans for cars. Loans for houses. Loans for businesses.

There are no loans for retirement.

That is why protecting retirement has to come first in the planning process, even when your heart is telling you to do whatever it takes for your child.

Our Philosophy

That doesn’t mean you don’t help your child.

It means you help them in a way that also protects your future, your options, and your quality of life.

Because a college outcome that destroys retirement is not really a win.

Where Parents Should Start

Before you start writing checks, liquidating assets, or signing loan documents, step back and look at the bigger picture.

• ✔️ Know where you stand for retirement
• ✔️ Understand the tradeoffs of income, assets, and borrowing
• ✔️ Look at college choices through the lens of your long-term goals
• ✔️ Build a plan that works for your whole life, not just the next four years

The goal is not just to get your child through college.

The goal is to get them through college without wrecking the next 25 to 30 years of your life.

Final Thought

At the end of the day, this really isn’t just a college planning conversation.

It’s a life planning conversation.

College is important.

But so is retirement.

So is your health.

So is your marriage.

So is your ability to stop working when you want to stop working.

The goal is not just to get your child into college.

The goal is to build a plan that works for your entire family — not just for four years, but for the next forty.