Which is more important, saving for retirement or your children’s college tuition? From a financial standpoint, the answer is clear – retirement comes first. But that’s not the way life works. Our emotions play an important factor in financial decisions, especially regarding our children. You must resist the urge to save for the kids’ education instead of your retirement.

Don’t feel guilty

Somewhere along the way, parents started believing they needed to provide everything for their children. Everyone gets a trophy, every child plays on a travel sports team, every minute of the day needs to be planned and accounted for with activities, and we need to support our children for years financially.

“Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.” – Dale Carnegie

How are they going to learn to become self-supporting adults? Life isn’t always easy. I’m rambling a bit, but the point I want to make is that you cannot sacrifice your retirement for your children’s education. Unfortunately, that is what’s happening. According to the Fed’s Survey of Consumer Finances,

“In 2016,  3.6 percent of Americans age 65 to 74 were still paying off a student loan, up from 0.6 percent as recently as 2001.”

Going from .6% to 3.6% doesn’t sound like much, but that’s not the whole picture. It’s not just about carrying student loan debt into retirement. I’m concerned with those people in their 30s, 40s, and 50s who are redirecting their retirement savings to their children’s college tuition – parents who must then delay retirement or face the prospect of retirement with little or no savings.

You can’t get a loan for retirement

I think every financial advisor uses that line. It’s the truth. You must fully fund your own retirement. No one is going to help you. Stopping your retirement plan contributions or taking early distributions does more harm than you realize. You will realize it when you want to retire.

Taking early distributions from your IRA or 401(k) is treated differently when used to pay for tuition. Both are treated as taxable income (which could affect financial aid the following year), but the IRA and Roth IRA are exempt from the 10% penalty. The 401(k) is not exempt from the 10% penalty. You may be able to take a loan out from your 401(k), but you’d be better off taking a student loan and letting your 401(k) grow.

Distributions from a Roth IRA are a possibility. There’s no penalty for removing your contributions only, but due to the annual contribution limits of $6,000/$7,000 (age 50+), the balances usually aren’t enough to cover the entire tuition. In specific instances, using a Roth may have some merit.

I want to clarify one thing: excluding the Roth on occasion, all other options are not recommended. You will not be able to make up for the lost growth potential.

There are also risks involved that may leave you with some hefty bills and nothing to show for it.

• What happens if you run out of money in retirement? Do you want your children to have to take care of you? That would defeat the purpose of helping them.
• What if one of your children doesn’t graduate college or becomes a professional student who repeatedly changes majors? Are you going to keep on accumulating the debt?

Have your cake and eat it too

This isn’t an all-or-nothing proposition. You need to make your children partners in this venture. Tell them you’re covering and how much they’ll be responsible for. Design a college savings plan that works alongside your retirement savings plan.

Putting your retirement first doesn’t mean you can’t help your children. If you can build a nice-sized nest egg,  you may be able to help with student loans. Not only does it not sabotage your retirement, but your children are more grateful. They’ve become responsible adults (you hope) and understand what it’s like to pay bills.

Think carefully

Some parents want to help, even to the detriment of their own finances. If you’ve weighed the options and decided it’s the right thing to do, that’s what you’ll do. In the end, it will come down to your emotions. Think very carefully about the long-term consequences and possible outcomes. You don’t want to regret that decision in the future.