Would you be willing to postpone your retirement by two years if it meant your children could attend the college of their choice without taking out expensive student loans?

In 2007, Savingsforcollege.com conducted an online poll asking parents this exact question. If you have kids of your own, you’re probably not surprised that over 80% of respondents said they would postpone their retirement by two full years if their child could attend the college of his or her choice without taking on more debt.

Being a parent means being willing to give up your own comfort to protect your children’s future. What’s two years of retirement compared to ensuring your kids’ academic success and financial wellbeing?

Throughout my professional career as a Chartered Financial Analyst (CFA) and personal wealth advisor, I’ve been told many times that we need to emphasize to our clients the importance of creating their own retirement nest egg BEFORE they start saving for their kids’ education. But time and again, the very first question out of my clients’ mouths had nothing to do with their own retirement. Instead, it was “How do I provide for my kids’ future and make sure they’re taken care of if something happens to me?”

As a parent of three young children myself, I tend to relate to our clients and disagree with the conventional wisdom of my industry. For any parent, kids come first.

Over the past few years, I’ve found more evidence to support the idea that saving for kids’ education should be a greater priority for an investor than saving for retirement. In addition to the emotional reasons I’ve already described, I want to share five observations in favor of this point, based on my own research

1. Tuition Cost

Did you know that college tuition inflation is increasing at 6% per year, compared to the average consumer inflation of 2% and wage inflation of 3%? College costs have skyrocketed at a pace much faster than any other expense, including health care, over the past 30 years. According to Bloomberg, tuition, room, board, and fees have increased by more than 1200% over the past 35 years. Our wages can’t keep up with this college tuition increase! And as a result, students keep taking out expensive student loans to pay for school; many are even forced to move back in with their parents after college.

2. Different Timing of Two Goals

For almost all parents, sending your child to college will come much sooner than your retirement. We all agree that kids grow up fast, and while we’re embedded into our day-to-day routine of finding them the best schools, keeping up with their activities, preparing for their birthday parties, and planning family vacations, eventually your child turns 18 and is ready for college. Are you prepared to receive your first tuition bill?

In a typical family, let’s say the lucky parents have two kids about two years apart, when they’re in their late twenties. Fast forward 18 years. The kids go to college, and the parents are still relatively young – in their late mid-late 40’s. They still have 15-20 years of professional life ahead of them to save for retirement. Based on the statistics, professional careers – and all-important earning power – pick up when employees are in their 40’s, so these parents will be able to successfully bump up their retirement nest egg even after their kids go to college.

3. Option to Postpone Retirement

In addition to the point above about earning power increasing in the later stages of most careers, parents can always decide to work longer if their retirement savings are not sufficient. However, for most 18-year-olds, college enrollment is predetermined and not flexible. Not many parents I know would choose to delay their kids’ college experience. With the average life expectancy up significantly since the 1970’s, people tend to work longer and often make the decision to extend their working life to enable a better, more secure retirement

4. Employer-Matching Retirement Plans

Many working parents have an opportunity to save for retirement through their employer-matching 401(k) plans; however, employers don’t provide an option to match college savings plans. With automated paycheck deductions and employer-matching programs, saving for retirement becomes a habit for many working professionals. In addition, government programs like Social Security have traditionally provided some peace of mind that we will be able to maintain our standard of living into retirement. But what about college savings? Employers don’t usually offer additional incentives for parents to make automated payroll deductions into college savings plans, so parents are on their own when it comes to saving for their kids’ future.

5. Raise Responsible Kids

Lastly, I am a big believer that when you invest in your children and raise them to be responsible human beings, you have a greater chance that they will take care of you in retirement. When parents spend their time and energy to ensure their kids’ success and stability, those kids in turn are more able to help elderly parents financially. According to a study by the Economic Policy Institute, college graduates earned an average of 56% more than high school grads in 2015. It’s worth it to invest in your kids and teach them the right values, so that they can support you in retirement.

Given the choice, just about any parent would choose their child’s health and well-being over their own. So if you ask me whether saving for retirement or saving for your kids’ future should come first, I can confidently say that your kids should come first. The financial industry may tell you otherwise, but if you’re ever in doubt, just refer to the five facts I’ve mentioned in this article, follow your gut, and put your mind at ease.

Author: Ksenia Yudina, mother-of-three, is a financial expert with over 10 years experience in the financial industry as well as the founder of U-Nest.com. U-Nest is an intuitive & easy-to-use college savings mobile app for parents to plan for their kids. Their mission is to help parents save for the kids’ education in the most efficient and tax-advantaged way.


College Savings Calculator is a hypothetical tool that demonstrates how monthly contributions, age-based asset rebalancing, and tax savings may impact the long-term value of your account, and do not take into account a portfolio’s underlying investment management fees. Calculations assume the private institution cost inflation is 2.8%, public out of state cost inflation is 3.9%, public in state cost inflation is 2.7%. Portfolio is assumed to have only stocks and bonds. Monthly equity returns are based on the historical data from the 10-year track record of the stock market (SPY). Monthly fixed income returns are based on the historical data from the 10-year track record of the bond market index (AGG). The current college expenses are provided by the collegeboard.org. Actual account performance may differ due to market fluctuations, changes in recurring investments, and asset allocation. The information provided here is for illustrative purposes only and does not represent actual or future performance of any investment option and is not intended to predict or project the investment performance of any security or index.

Ksenia Yudina, CFA, MBA

Founder and CEO

Ksenia is the Founder and CEO of U-Nest, the first mobile app that makes it easy for families to save for college. As an entrepreneur and finance professional, Ksenia has focused on alleviating the impact of student debt on families across the economic spectrum. Previously, Ksenia was a Vice President atCapital Group/American Funds, the largest 529 provider in the U.S. In this role, she played a leadership role in helping parents plan and manage their finances, with a focus on the future well-being of their children. Prior to Capital Group/American Funds, she was founder of a residential real estate company. Ksenia earned her bachelor’s degree in finance from CaliforniaState University Northridge, and an MBA from UCLA’s Anderson School of Management.

Mike Van Kempen

Chief Operating Officer

Mike joined U-Nest in September 2019 as COO. He was previously at Acorns, a financial wellness platform, where he spearheaded the analytics and growth initiatives. Mike successfully expandedAcorns’ paid acquisition strategy, adding over 4.5 million investment accounts. Mike began his career in strategy & analytics at Belly, a Chicago-based loyalty startup in 2012. At Belly, Mike led projects that fueled growth across all aspects of the business, growing the customer base from1,000 to over 11,000 merchants, and accumulating a membership of over 2 million customers.Mike holds a B.B.A. in Finance from Loyola University of Chicago.

Steve Buchanan

Chief Technology Officer

Steve has over 20 years of experience in delivering digital innovations in the financial sector. Steve previously orchestrated product architecture and innovation as a Solutions Architect/ Fintech consultant at Union Bank. Prior to Union Bank, he was Chief Architect and Director of Engineering at Calypso, a Silicon Valley startup, where he architected and built multiple financial solutions. He was also Head of Global Integrations at Globe One in Vietnam where he integrated its Peer-to-Peer lending products into core banking solutions. Steve also built the first ever electronic Equities &Equity Options trading systems for Scottish stock brokers Wood Mackenzie (acquired by CountyNatWest). He is a graduate of Edinburgh University.

Peter Mansfield

Chief Marketing Officer

Peter has built an impressive track record in multiple financial industry segments including payments, credit/prepaid cards and lending. He has played an instrumental role at a succession of financial industry leaders, co-founding companies such as Brand3 (acquired by American Express) and PropertyBridge (acquired by Moneygram), and, as the early stage marketing lead at Marqeta (where he was team member number two), BillFloat and WallabyFinancial (acquired by Bankrate).He has helped fast-growth companies reach an aggregate market value of close to $8 billion. Peter holds a bachelor’s degree in economics from the University of Angila, UK.

Sonya Kidman

Client Relationship Manager

Sonya Kidman is a Customer Success professional with a decade of experience in advocating for consumer through user research and genuine empathy. Sonya specializes in user behavior and regularly attends national and global training sessions in wellness and people analytics tools. Sonya is a true global citizen was born in Russia, grew up in Israel, lived and worked in Canada and NewZealand. That global expertise along with an undergraduate degree in Sociology from Tel AvivUniversity have helped to shape a bullet-prof Sonya's framework to develop a winning customer strategy.

Frank Mastrangelo

Board Member

One part banker and one part technologist, Frank spent his early days with the Annenberg Foundation and PNC Bank. His career path led him to Jefferson Bank, where he led the build-out of its electronic banking platforms, and where he would forge a powerful alliance with The Bancorp co-founder Betsy Z. Cohen. As President and COO of The Bancorp from its inception in 1999 Frank played a critical role in helping the organization become an industry bellwether for branchless financial services and a global leader in payments. For this, he has become a widely respected fintech expert, and thought-leader. Frank was recognized in 2013 by Banking Innovation, a leading industry journal, as an “Innovator to Watch.” and as one of the innovators shaping the future of banking. Frank is a graduate of West Chester University of Pennsylvania.