22 percent of workers are very confident they will have enough money in retirement  (Employee Benefit Research Institute’s “Retirement Confidence Survey")

One of the toughest choices parents face is whether to devote their resources to retirement or their child’s education. They know they would cover both if possible but there is usually a finite amount of resources in every household. parents-kiss.jpg

How do you decide against giving the best life to your children? What kind of parent chooses themselves over their kids? These parental values are affirmed by the fact that your lifetime financial earnings are exponentially higher (on average) if you have a college degree; and starting a career without a huge amount of debt also clears an easier path to financial success.

Meanwhile, most financial planners recommend you take care of your retirement over paying for your child’s college. Why is that? Well, there are objective and practical reasons why – but most of the reasons benefit the older you… and that rarely convinces you to behave rationally. People identify with their older selves the same they would a stranger. How often would you give your money to a stranger?

The following are long-term reasons to prioritize your retirement over your child’s education:

  1. Better Health – the most common causes of stress are work related and stress is widely known to cause many health issues that increase your mortality risk. Retiring earlier reduces the total amount of stress you experience during your lifetime which can reduce the substantial costs of poor health during retirement. A healthy physical and mental state helps you enjoy your relationships, hobbies, and travels in retirement too. (Barron's, n.d.)
  2. You are your kids’ primary financial advisor – now more than ever, kids get their financial advice from their parents. (Berman, n.d.) This also means they are more likely to copycat what you do. Do you remember how old you were when you started to make your best financial decisions? Chances are it didn’t start until after you turned 25. Your kids may not “get it” until they are immersed in the real world too. And that’s when they’ll begin to understand how well prepared their parents are for their retirement. What sort of example will you be? parents-kiss.jpg
  3. Better life experiences – speaking of being an example for your kids... If you accumulate more money and have a more ideal retirement, your kids will notice how much fun you’re having. Wouldn’t it be sad for them if YOU couldn’t do all the things you dreamt of doing? Your kids want you to have an ideal retirement… and it’s likely you’ll invite them (and pay for) some of those experiences too.
  4. Pass more assets to your children at death – whether you value it or not doesn’t matter. Wealthy families stay wealthy for generations on end because the arithmetic works. When your assets have more time to grow and compound (instead of being spent earlier in your life), your kids will inherit after they built their own financial foundation. It creates a cycle for exponential growth. Those wealthy folks just figured it out a generation or two ago. 
  5. Avoid making your kids be your caregiver – The U.S. population is getting older every year and the frequency of family members missing work to care for a parent is very common now. Entire families stress out when the elderly cannot live independently any more. Aside from missing work (and income) when caring for a parent, caregivers experience higher levels of depression, stress, frustration, and many more health conditions. (Barron's, n.d.) If you can pay for your own care, your relationship with your kids, their finances, and their health will be better too.

Figuring out a healthy balance between building your personal wealth, and helping your children build theirs is ideal. Putting a plan together and evaluating your capabilities is how to start. By in large, everyone in your family may be better off if you take care of your retirement before going broke paying for a kids’ education.  

Employee Benefit Research Institute’s “Retirement Confidence Survey

http://www.barrons.com/articles/the-real-cost-of-health-care-in-retirement-1486186876

https://www.wsj.com/articles/where-millennials-go-for-financial-advice-1450062181