Saving for College vs Retirement: Prioritizing Your Future
A Fiduciary’s Guide to Prioritizing Your Financial Goals
As a parent, providing your child with every opportunity, including saving for a college education, is deeply important. But in 2025, the rising cost of tuition and the reality of longer retirements are creating a new dilemma: saving for college vs. retirement.
Should you focus on saving for college or make retirement your top priority?
At Cornerstone Wealth, we believe you don’t have to sacrifice your future to support your children’s dreams. Here’s how to create a plan that achieves both.
Why Retirement Savings Should Usually Come First
While it may feel counterintuitive, prioritizing your retirement is the foundation of a secure financial future for you and your family.
No Loans for Retirement: Your children can access funding for college through student loans and aid — but there’s no option to borrow for retirement.
Compounding Growth: The earlier you start investing in retirement accounts, the greater your long-term growth. Delaying savings by just a few years can make a significant impact.
Healthcare Costs on the Rise: Modern retirees face increasing medical expenses, making careful retirement planning essential to protecting your long-term health and security.
Pro Tip: Maximize any employer 401(k) match first. This is additional money for your future that grows tax-deferred — and it shouldn’t be left on the table.
Navigating College Costs Without Sacrificing Retirement
Prioritizing retirement doesn’t mean ignoring your child’s college goals. Instead, it’s about balance and strategic planning, particularly when considering saving for college vs. retirement:
Open a 529 College Savings Plan: Take advantage of tax-free growth on withdrawals for qualified education expenses and (in many states) up-front deductions or credits on contributions.
Set Boundaries with Confidence: Clarify how much you’re able or willing to contribute from college funds — whether that’s a percentage of tuition, covering textbooks, or helping with room and board.
Encourage Student Engagement: Empower your child to pursue scholarships, grants, student loans, and part-time work. This creates partnership and responsibility.
Balancing Both Goals: The Cornerstone Wealth Approach
With the right plan, you can build your retirement while supporting your children’s dreams:
Comprehensive Planning: A financial advisor can help analyze your investment strategies, retirement needs, college funding goals, saving strategies, investment choices, and timeline to customize your plan.
Education Planning Integration: We explain 529 plans, custodial accounts, and beneficiary designations, helping you select the best fit for your family.
Optimize Tax Strategies: We identify deductions and credits (such as the American Opportunity and Lifetime Learning Credits) to maximize your resources while minimizing expenses.
When Saving for College Should Come First
There are exceptions — you might prioritize education savings if:
• You’re on track or ahead of schedule for retirement funding
• You expect to receive significant inheritances or windfalls
• Avoiding student debt for your children is a core family value
Regular reviews ensure you never shortchange your own retirement and future.
Next Steps: Start Balancing College and Retirement Savings
Don’t let competing goals and mounting expenses lead to unnecessary stress or last-minute sacrifices.
• Keep your retirement investments on track
• Help your child achieve their educational goals and manage educational expenses effectively
• Avoid debt, maximize financial confidence, prioritize saving, and make wise investment decisions
Schedule Your Complimentary Planning Session
At Cornerstone Wealth, our fiduciary advisors specialize in helping parents create clear, customized investment strategies for college funds and retirement, ensuring that your contributions lead to you and your child each being a beneficiary of wise financial planning.
Schedule a complimentary consultation and learn how to secure both your retirement and your child’s future.
This is for informational purposes only and does not serve as personal advice. Please speak to a qualified representative regarding your unique circumstances. Links within this blog are not associated to Cornerstone Wealth and are subject to change. Hyperlinks will take you to a third-party website whose content Cornerstone Wealth does not control. Investment advisory services offered through Cornerstone Wealth Group, LLC dba Cornerstone Wealth, an SEC registered investment adviser.
