I’m 49 with minimal retirement savings and want to fund my son’s college: am I making a huge mistake?

A 49-year-old called the Rich Habits Podcast with a question millions of parents quietly carry: should I borrow to send my son to a four-year school even though my retirement accounts are nearly empty? Host Robert Croak’s answer was blunt. He called the plan “crazy” and told the caller, “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 stakes are concrete. A parent who takes out Parent PLUS loans or co-signs private student debt at 49 is locking in monthly payments through their early 60s, the exact window they need to triple or quadruple their nest egg. Miss that window, and the child ends up funding the parent’s retirement anyway, just through caregiving and cash transfers later.

The verdict: Croak is right, and the math is brutal

Start with what compounding can still do for a 49-year-old who gets serious. Invest $1,000 a month at a 7% annual return from age 49 to 65, and you finish with roughly $345,000. Stretch the same contribution to age 70, and the balance grows to about $525,000. Every dollar diverted to a child’s tuition is a dollar that does not compound through those final, highest-growth years.

Now layer on today’s borrowing environment. The 10-year Treasury yield sits near 4.6%, near the 98th percentile of the past year. Parent PLUS loans price off that curve plus a fixed margin, putting current rates near 9%. A $120,000 Parent PLUS balance at that rate on a 10-year standard plan runs about $1,520 a month. That payment alone, redirected into a retirement account from age 49 to 65, would compound into roughly $525,000.

The opportunity cost is the entire retirement.

Croak’s alternative is mechanical. He noted that “the average community college is $5,000, $6,000, $7,000, $8,000, $9,000 a year” and argued the first two years there, followed by a transfer to an in-state public school, is the sensible play for a family already behind. He also flagged that AI and workforce changes are devaluing many degrees, making a six-figure liberal arts bill an even shakier investment.

The variable that decides everything: your current retirement balance

Croak’s standard for writing the tuition check was unambiguous: only if you “had millions of dollars” already saved. That is the dividing line.

Run two scenarios. Parent A has $1.8 million invested at 49. Even with zero new contributions, at 7% that grows to roughly $5.3 million by 65. Writing $40,000-a-year tuition checks from taxable savings barely dents the trajectory. Parent A can fund the four-year school.

Parent B has $40,000 saved at 49, the profile of the original caller. The national personal savings rate has dropped to 4%, and Clark Howard’s team notes “the average American saves just 4% of their pay.” Parent B is the average American. For them, every $10,000 borrowed for tuition is roughly $30,000 of retirement assets given up by 65. The four-year private school becomes a financial unmasking.

What to actually do this month

1. Run the brutal number. Pull your 401(k) and IRA balances, then use the SSA.gov benefit estimator. If projected Social Security plus 4% withdrawals from current assets cannot cover essentials at 67, you cannot co-sign anything.
2. Have the community college conversation now. Two years at $5,000 to $9,000 annually, then a transfer to an in-state public university, typically cuts a bachelor’s degree’s total cost by more than half. The diploma reads the same.
3. Cap any parental contribution at current cash flow. If you can pay $400 a month from current income without skipping retirement contributions, that is your number. Your son fills the rest with federal student loans in his name, scholarships, and work-study.
4. Max the employer match first. With the federal funds rate near 3.8% and high-yield savings paying near 4%, even a conservative retirement allocation beats subsidizing tuition with borrowed money at 9%.
5. Pressure-test the major. If the degree path lacks a clear earnings trajectory, the real question is whether the credential pays back its own loans, in your son’s name, within ten years of graduation.

Loving your kid is separate from financing their college. At 49 with thin retirement savings, the most generous thing you can do for your son is refuse to become his retirement problem.