Should You Save for Retirement or Your Kids’ College First? An Expert Weighs In

Saving money isn’t exactly the most fun topic of conversation. But biting the bullet and getting serious about financial literacy pays in dividends for you and your family. So when we sat down with senior vice president of Charles Schwab & Co., Inc., Carrie Schwab-Pomerantz, CFP at StacksHouse, we had some questions. 

Unfortunately, she didn’t give us any get-rich-quick tips, but she did discuss a growing problem in the American financial landscape. A recent report from the U.S. Government Accountability Office says 48 percent of adults over the age of 55 have nothing saved for retirement. On top of that, a new survey found only 40 percent of Americans could cover an unexpected $1,000 expense. Sure, people have families, they want to travel and there’s the never-ending money-eater, Amazon. But with so many folks spread thin, it seems important to iron out financial priorities. Chief among them is which should you save for first, your child’s future or your own? 

As a mother herself, Schwab-Pomerantz knows it’s counter-intuitive, but she says we should save for retirement first. 

“I was very unpopular when I first said you have to save for retirement over your child’s education. I know it goes against the grain of good parenting,” the Charles Schwab Guide to Finances After Fifty author reasoned. “But think about it: You don’t have a second chance to save for retirement. You cannot get a loan or a scholarship, and you don’t want to be a burden to your children.” 

Schwab-Pomerantz went on to explain that it’s best to prepare yourself and “when you have a little extra money, even a little bit, put it away in 529 accounts.” (Note: A 529 plan is designed to save on future education costs.) It’s a practice she likens to the whole put-on-your-own-oxygen-mask-first analogy. “Take care of yourself and your kids will thank you for it,” she said. 

So how does one even begin saving for retirement? Schwab-Pomerantz actually had her children start saving for retirement when they were teens. And while most of us got a later start, she says it’s never too early begin. Even $100 a month or $50 a month makes a big difference in the grand scheme of things, so keep putting your hard-earned money away in a 401(k), Roth IRA or other retirement plan (especially if your company matches your contributions). Once you’re able to free up a little more disposable income on top of what you’re already putting into a retirement account, then think about the college fund. 

At the end of the day, if the amount you have saved isn’t enough for your kids’ education, she suggests encouraging them to take out loans or seek scholarships, really anything other than taking money out of your own 401(k). 

Short story: Mom and Dad’s retirement savings actually benefit everybody. 


Cat mom, yogi, brunch enthusiast

Lex is an LA native who's deeply obsessed with picnics, Slim Aarons, rosé, Hollywood history and Joan Didion. She joined PureWow in early 2017.