The Question Many Parents Never Expected to Ask

Imagine you're 62 years old.

Your retirement savings are growing, Social Security is only a few years away, and you've spent decades planning for the next chapter of your life.

But there's one complication.

Your child is about to start college.

Or maybe they're already enrolled.

Now you're asking:

Can I still retire if I'm helping pay for college?

It's one of the most common retirement planning dilemmas facing parents today.

The good news is that retirement and college funding don't have to be mutually exclusive.

The challenge is understanding the tradeoffs before making a decision.

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Why This Situation Is Becoming More Common

Several trends are colliding at once:

• People are having children later in life
• College costs continue rising
• Retirement ages are becoming more flexible
• Many parents are supporting children longer than previous generations

As a result, parents often find themselves approaching retirement while simultaneously facing major education expenses.

For some families, these expenses can exceed $100,000 over four years.

That money has to come from somewhere.

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The Biggest Mistake Parents Make

Many parents instinctively prioritize college over retirement.

The reasoning is understandable.

Parents want to help their children succeed and avoid student debt.

However, there is an important reality:

You can borrow for college. You cannot borrow for retirement.

A student has options:

• Scholarships
• Grants
• Student loans
• Work-study programs

A retiree generally does not.

Every dollar removed from retirement savings today is a dollar that loses years of future growth.

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The Retirement vs. College Timeline

Scenario A: Prioritize College

Age 62: Retire

Portfolio:
$1,200,000

College Contributions:
$30,000/year for 4 years

Total College Cost:
$120,000

Result:

Retirement Income:
Lower

Portfolio Longevity:
Reduced

Financial Flexibility:
Reduced

Scenario B: Share the Cost

Age 62: Retire

Portfolio:
$1,200,000

College Contributions:
$15,000/year

Student Loans:
Partial

Scholarships:
Partial

Result:

Retirement Income:
Higher

Portfolio Longevity:
Improved

Financial Flexibility:
Better

The difference often becomes larger than families expect.

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How College Expenses Affect Retirement

College costs create pressure in several ways.

Reduced Portfolio Growth

Money spent on tuition is no longer invested.

That means:

• Less compounding
• Smaller future balances
• Lower retirement income potential

Increased Withdrawals

If college expenses come directly from retirement assets, withdrawals may occur years earlier than planned.

Higher Sequence Risk

Large withdrawals near retirement can increase the impact of market downturns.

If markets decline while college expenses continue, retirement plans may face additional stress.

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Questions Every Parent Should Ask

Before funding college from retirement assets, consider:

Question 1

Can my retirement plan still succeed if I pay these expenses?

Question 2

Will college funding delay retirement?

Question 3

Would I still have enough income if markets perform below expectations?

Question 4

What happens if healthcare costs rise later?

These questions are often more important than the college bill itself.

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Three Scenarios Every Parent Should Test

Scenario 1: Pay 100% of College Costs

College Contribution:
100%

Retirement Impact:
Highest

Potential outcome:

• Lower future income
• Smaller portfolio
• Higher retirement risk

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Scenario 2: Split Costs With Your Child

College Contribution:
50%

Student Contribution:
50%

Potential outcome:

• Better retirement security
• Shared responsibility
• More portfolio flexibility

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Scenario 3: Protect Retirement First

College Contribution:
Limited

Retirement Contributions:
Continue

Retirement Date:
Unchanged

Potential outcome:

• Stronger retirement outlook
• Larger future income
• Greater long-term flexibility

This option is often emotionally difficult but financially powerful.

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What If Retirement Is Only a Few Years Away?

If retirement is less than five years away, college costs deserve special attention.

At this stage:

• Portfolio protection becomes more important
• Sequence-of-returns risk increases
• Recovery time decreases

Large education expenses can have a bigger impact than they would earlier in life.

The closer you are to retirement, the more valuable scenario planning becomes.

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A Better Way to Think About the Decision

Instead of asking:

Can I afford college?

Ask:

How does paying for college affect my future?

That shift changes the conversation.

You are no longer evaluating education costs in isolation.

You are evaluating them alongside:

• Retirement income
• Future healthcare expenses
• Social Security timing
• Lifestyle goals
• Legacy objectives

That creates a more complete financial picture.

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Key Takeaways

• Many parents face college expenses close to retirement.
• Funding college can reduce future retirement income and portfolio longevity.
• Students often have more financing options than retirees.
• Scenario planning helps reveal tradeoffs before making decisions.
• Splitting costs may improve long-term retirement outcomes.
• Retirement and college goals should be evaluated together, not separately.

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How Nestly Helps

With Nestly Advisor, you can understand how major life decisions affect your future financial plan.

Using Nestly Studio, you can compare retirement outcomes under different college funding strategies and see how each choice affects future income.

With Nestly Lab, you can model scenarios such as:

• Paying 100% of college costs
• Splitting expenses with your child
• Delaying retirement
• Reducing withdrawals
• Adjusting savings goals

Because the best financial decisions aren't about choosing between your child and your retirement—they're about finding a path that supports both.