At 49 with Little Retirement Savings, She Wants to Pay for Her Son’s College. Should She?
A 49-year-old mother called the Rich Habits Podcast with a dilemma that haunts millions of American parents: Should she take on debt to send her son to a four-year college, even though her retirement savings are virtually nonexistent? Host Robert Croak answered without sugarcoating. He called her plan “crazy” and warned, “You have to look out for yourself first, because nobody’s going to be there to pick you up in retirement if you don’t have the money.”
The math is unforgiving. A parent who takes out Parent PLUS loans or co-signs private student debt at age 49 is locking in monthly payments that stretch into their early 60s—precisely the years when retirement accounts need the most aggressive growth. Miss that window, and the child may end up supporting the parent in old age, whether through direct caregiving or cash transfers, effectively reversing the intended generosity.
Consider what compounding can still achieve for a 49-year-old who gets serious. Investing $1,000 a month at a 7% annual return from age 49 to 65 yields roughly $345,000. Extend that same contribution to age 70, and the balance climbs to about $525,000. Every dollar diverted to tuition is a dollar that misses those final, highest-growth years.
Now factor in current borrowing costs. The 10-year Treasury yield hovers near 4.6%, close to the 98th percentile over the past year. Parent PLUS loans are priced off that curve plus a fixed margin, pushing current rates to roughly 9%. A $120,000 Parent PLUS balance at that rate on a 10-year standard repayment plan requires about $1,520 a month. Redirect that same payment into a retirement account from age 49 to 65, and it would compound into approximately $525,000.
The opportunity cost, in short, is an entire retirement.
Croak offered a mechanical alternative: “The average community college is $5,000, $6,000, $7,000, $8,000, $9,000 a year,” he noted, arguing that the first two years at a community college followed by a transfer to an in-state public university is the sensible route for a family already behind on savings. He also pointed to the shifting value of degrees in an AI-driven economy, calling a six-figure liberal arts bill an increasingly shaky investment.
His threshold for writing a tuition check was unambiguous: only if you “had millions of dollars” already saved. That, he said, is the real dividing line.
Run the numbers on two scenarios. Parent A has $1.8 million saved at age 49. Even with no additional contributions, a 7% return grows that to roughly $5.3 million by age 65. Writing $40,000-a-year tuition checks from taxable savings barely registers. Parent A can fund the four-year school without blinking.
Parent B has $40,000 saved at 49—the profile of the original caller. With the national personal savings rate now at 4%, and the average American saving only about 4% of their pay, Parent B is typical. For her, every $10,000 borrowed for tuition represents roughly $30,000 in lost retirement assets by age 65. The four-year private school becomes a financial unraveling.
Loving your child is separate from financing their college. At 49 with thin retirement savings, the most generous thing a parent can do is refuse to become their child's retirement problem.
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