Plenty of parents wonder if they’re saving enough for their kids’ college. Far fewer stop to ask the more important question of whether they’re saving too much for college at the expense of their own retirement.
It happens more than you’d think. A parent opens a 529 the week the baby comes home, funds it faithfully every month, and meanwhile contributes just enough to their 401(k) to get the match, or less. On paper, it feels responsible. In practice, it can leave you with a fully funded education account and a retirement shortfall.
Money expert Clark Howard and fiduciary financial advisor Wes Moss have both spent years talking families through this exact tradeoff. Their advice points in the same direction, and it gives you a simple way to test whether your priorities are in the right order.
Why Retirement Should Come Before College Savings
Clark’s position on this has been consistent for decades: “Don’t save a penny for education until you’re saving everything you can for your own retirement.”
The logic comes down to which goal has a backup plan. A student who arrives at college with an underfunded 529 has options. In-state tuition, community college, scholarships, grants, work-study and federal loans all exist. A 65-year-old with an underfunded retirement account has none of those.
Wes Moss, a fiduciary financial advisor and host of Ask an Advisor on the Clark Howard Podcast, puts it this way: “You can’t get a loan for retirement. Your kid can always get a loan, a scholarship, a grant, or a payment plan for college, but there’s no financial aid office for your 65-year-old self. That’s why retirement savings has to come first, every single time.”
Clark has also seen how this plays out on the other end for parents who got the order wrong. In a recent column, he wrote: “Let me be blunt: Parental guilt can be a self-destructive motivator. There are so many college options available at so many different tuition levels. Yet, I see it all the time: Parents stop contributing to their own retirement accounts just so their kid can go to an ‘It’ school.”
The bitter irony, in Clark’s telling, is what happens decades later: “Then, way down the road, when the parents are in retirement and don’t have enough money to live on, those exact same adult children look at them and say, ‘Gosh, Mom and Dad, you really should have done a better job saving for retirement.’ They develop amnesia about the massive financial sacrifice that got them their degree in the first place.”
Underfunding your own retirement to pay for college doesn’t just put you at risk. It can eventually put the financial burden right back on the child you were trying to help.
The 15% Test
So when is it OK to start saving for college? Wes uses a specific checkpoint.
Saving less than 15% of your income for retirement? Prioritize retirement.
Saving 15% or more? Consider adding money to a 529.
Already doing both? Great, but keep retirement as the priority if money gets tight.
Wes explains, “Saving for college is a balance — your own retirement is the anchor, college is the stretch goal built around it.”
If 15% isn’t realistic today, don’t let that discourage you. Save what you can, increase your retirement contributions as your income grows and treat 15% as a target to work toward over time. Making steady progress is more important than trying to fully fund every financial goal at once.
If You Pass the Test, Start Early
Once retirement is on track, the best thing you can do for college savings is start as soon as possible, even with small amounts.
“If you start setting aside even a modest amount when your kids are still in diapers, say $200 to $300 a month into a 529, you’re far more likely to hit both goals than someone who waits until their kids are 15 and tries to play catch-up on both fronts at once,” Wes says.
The math backs him up.
Starting at birth? Investing $250 per month from birth could grow to roughly $107,000 by age 18 (assuming a 7% annual return).
Waiting until age 10? You’d need to save about $850 per month to reach the same balance.
You can run your own numbers with our investment growth calculator.
The 529 Rules Removed the Biggest Excuse
One old objection to 529s was the fear of overfunding an account your kid might never use. That risk is much smaller now. Under current rules, up to $35,000 of leftover 529 money can be rolled into a Roth IRA for the beneficiary over time, subject to annual contribution limits.
Clark calls this the ultimate 529 backup plan. If your kid earns scholarships, skips college or doesn’t use all the money, the balance “gives your child an incredible, tax-free head start on their retirement savings before they even hit their twenties,” he writes.
But the rollover option cuts both ways. It makes a 529 safer to fund, not a reason to fund it ahead of your own retirement. A $35,000 lifetime rollover cap is a nice consolation prize for your child. It is not a substitute for the hundreds of thousands of dollars you may need in your own accounts.
What If College Arrives and the 529 Falls Short?
That’s okay. An underfunded college account at 18 is a solvable problem.
Clark’s favorite solution is the community college transfer strategy. Have your child spend freshman and sophomore years at an affordable local school, knocking out prerequisites, then transfer to the target university for junior and senior years. Transfer admission is generally less competitive than freshman admission, and the diploma comes from the school where your child finishes.
Clark is also direct about the conversation many parents dread: “It is completely okay for you to look at your teenager and say, ‘We can’t afford that college. Period.’”
A Quick Self-Check
If you want to know whether you’re overprioritizing college savings, ask yourself three questions.
Are you saving at least 15% of your income for your own retirement? If not, redirect college contributions to your retirement accounts until you are.
If you’re contributing to a 529, did retirement hit 15% first, or did the 529 get funded ahead of it? The order matters more than the amounts.
Does your college savings plan assume you’ll fully fund four years at any school your child chooses? Partial funding combined with smart school choices, scholarships and student contributions is a legitimate plan, and it’s the one that protects both generations.
The goal isn’t to fully fund every financial objective at once. It’s to put them in the right sequence.
Final Thoughts
You don’t have to choose between your retirement and your child’s future, but you do need to save for them in the right order. Build your own financial security first, then put extra dollars toward college. A child can borrow for school, earn scholarships or choose a lower-cost path. Your retirement doesn’t come with those options. Once you’re ready to save for college, Clark recommends choosing a direct-sold 529 plan. You can see which plans make Clark’s Dean’s List of low-cost options in our 529 plan guide.
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