Answer extracted from the Money Guy Show podcast — listen to the full episode below.
Why does The Money Guy Show advise against prioritizing children's college savings over your own retirement when you are behind?
Children have access to scholarships, grants, and student loans to fund education; you have none of these options in retirement. The Money Guy Show argues that when you're behind on retirement savings, funding your own future takes precedence because it's the only path available to you—whereas your children have multiple financial alternatives.
The gap in available resources is stark. 56% of Americans choose to save for their kids' college instead of their own retirement, but this choice overlooks a fundamental truth: there is no scholarship for retirement, no grant for elderly living expenses, and no loan program that will fund your post-work years.
According to the Money Guy Show's Financial Order of Operations—a strategic framework for building wealth—college savings doesn't appear until step 8, well after you've maximized a Roth IRA, contributed to a 401(k), and secured at least 25% of your gross income toward your future. This ranking isn't arbitrary; it reflects the reality that your retirement security must be established first.
As discussed at length in the episode, this is not an argument against helping your children pay for college—it's a priority question. If you're still catching up on retirement contributions, funding your own security creates a stronger family foundation than co-signing student loans or draining retirement accounts later to bail out your adult children.
The asymmetry: Your options versus theirs
Your children, when faced with college costs, can pursue multiple paths: federal Stafford loans, Parent PLUS loans, private student loans, grants based on merit or need, work-study programs, and community college transfers. The combination of these options provides flexibility and time to plan.
You, in retirement, have no equivalent safety net. You cannot take out a personal loan to fund living expenses at age 75, and even if you could, no lender would qualify you. Downsizing your home might work, but it's disruptive and often insufficient. Working longer is an option, but it shifts the entire retirement calculus.
The Money Guy Show emphasizes this in this podcast discussion: when you're behind, you must play with the resources only you can access. Your earned income during your working years, invested in tax-advantaged retirement accounts, is your singular leverage point.
Why the Financial Order of Operations delays college funding
The Financial Order of Operations prioritizes your retirement accounts first because of a simple mathematical principle: compound growth requires time and principal. A dollar invested in your Roth IRA at age 45 has only 20 years to compound; waiting five more years to start college savings means your retirement dollar has 15 years left instead of 20.
By contrast, your children will have access to student loans that can be repaid over 10, 20, or even 25 years after graduation—a timeline that actually gives them flexibility to earn money and repay debt. You cannot borrow your way through retirement in the same way.
For more detail on how aggressive savings rates at different ages transform a late-start scenario, explore what the Money Guy Show recommends for late starters in their catch-up strategies.
The real-world math
Consider two scenarios. In one, you dedicate an extra $5,000 per year to your children's 529 college fund starting today. Over 10 years, that's $50,000 plus growth. In the other, you redirect that $5,000 into your 401(k) catch-up contributions and max out your Roth IRA, both of which offer tax advantages and longer compound horizons.
The second scenario compounds tax-free (Roth) or tax-deferred (401k) for 20 years until your planned retirement at 65. The first scenario partially funds college costs but leaves a smaller cushion for your own withdrawals—and your child may still need loans anyway.
The Money Guy Show's argument is pragmatic: secure your own oxygen mask first, then help others. If your retirement portfolio is underfunded, every dollar redirected to college savings is a dollar not compounding for your future security, increasing the likelihood you'll become a financial burden on your children later.
Key takeaways
- Children have scholarships, grants, and loans; retirement has none. When behind, prioritize the resource pool only you can access.
- The Financial Order of Operations delays college savings to step 8, after maxing Roth IRAs and 401(k)s, because compound time is non-renewable.
- 56% of Americans misdirect savings toward college instead of retirement, but this choice often undermines both goals and your long-term independence.
- Securing your retirement first is the strongest gift to your children—avoiding future financial dependence on them.
See also
What happens to Late Start Larry's retirement portfolio if he increases his savings rate from 15% to 25% or 35%?
Late Start Larry, age 45 with nothing saved, earning $120,000 and targeting retirement at 65 with an 8% average return: increasing savings from 15% to 25% or 35% dramatically accelerates portfolio growth and retirement readiness.
What savings rate does The Money Guy Show recommend for people who got a late start on retirement?
The Money Guy Show recommends a savings rate of 25% of gross income as a baseline, noting that the typical American starts saving between age 30 and 33, making aggressive catch-up essential for those who begin later.
How much should Americans have saved for retirement at different ages according to The Money Guy Show milestones?
The Money Guy Show recommends saving 20 times your gross income by retirement, using an 80% income replacement ratio. Milestones include 1x gross income by age 30 and scale upward proportionally with each decade.