Putting On Your Oxygen Mask First: A Child’s Education

Borrowing from the airplane analogy of, “Putting On Your Oxygen Mask First”, I’m applying it to saving for your child’s education. One of my clients recently asked me whether they should focus on financing their child’s education now and worry about their own retirement at a later time.

I told them that I believe that ideally, college and retirement should be part of their overall financial plan. But of course, they should still expect some trade-offs as they try to balance these goals. Realistically, they may have to work longer than they would like, or their children may have to borrow more money than they would like. Ultimately, the critical thing is that it is possible to meet both of these financial responsibilities. However, preparation is key.

Getting back to my opening premise: Putting On Your Oxygen Mask First. As my mother always told me, “You can’t give others what you don’t have…” In other words, you must take care of yourself before you can do anything for anyone else. When you stop and think about it, saving for your own retirement (i.e. “Putting On Your Oxygen Mask First”) can be even more important since unlike a college student who can apply for financial aid, there is none for retirement.

In addition, when you consider that your assets in retirement accounts (as well as life insurance or annuities) will not affect your child’s prospects for federal financial aid (unless you actually take distributions from them during the college years), it makes economic sense to save for your retirement first.

Of my greatest fears, being financially dependent on others’ at an older age is sky-high up there. Likewise, you probably do not want to support your children through their university years only to risk becoming a burden to them in your later years.

As with everything else in life, when it comes to financial planning, it depends on your situation. Choosing to save for your retirement now over paying for your child’s college education may just be the right thing to do.


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