George Kamel Says Save for Retirement Before Your Kid’s College Fund

A divorced mom called The Ramsey Show on November 11, 2026, with a question that every single-income parent eventually faces: should the next dollar go to her retirement or to her kid’s 529 college fund? Co-host George Kamel answered without pausing: “There is a 100% chance you will need to retire one day. There’s a 50/50 chance your kid goes to college. We know you’ll need to retire. Let’s put your own mask on first.”

The risks only run one way. If you get the order wrong, your child might graduate debt-free while you head into your 60s without enough saved. Social Security alone won’t carry you. The average retired worker’s check is estimated at $2,170 a month after the 2027 cost-of-living adjustment.

Kamel Is Right, and the Borrowing Math Proves It

Kamel’s advice holds up because college comes with a loan market and retirement doesn’t. A student can borrow for tuition. No lender will cover your groceries at 72.

Take a mom who is 40 and has $300 a month to spare. If she puts it into a 529 for 18 years, she contributes $64,800.

At an assumed 7% annual return, that grows to about $129,000 by the time she turns 58.

Suppose she sends the same $300 into her retirement account instead and leaves it alone until 67. Then it grows to about $242,000. That gap is the true cost of putting college first.

Now look at the child’s side. Say the student covers part of the bill with $30,000 in federal undergraduate loans. Those loans carry a fixed 7% rate for 2026-27.

On a standard 10-year plan, that works out to about $341 a month and roughly $10,900 in total interest.

The 529 balance would have covered more than $30,000 of school. The student still has other options, though: scholarships, in-state tuition, community college, and a part-time job. At 58, the parent has only one option.

To rebuild that $242,000 from scratch, she would need to invest about $1,616 a month for nine straight years at the same return. Few budgets can handle that this late in a career.

An employer match makes the case even stronger. With a 50% match, the retirement path grows to about $363,000. A 529 comes with no match at all.

Your Retirement Savings Rate Decides Which Account Wins

One number settles which account gets the next dollar: whether you already invest 15% of household income for retirement. That’s the Ramsey rule, with college savings coming next.

If you’re below 15%, every dollar that goes to college comes from the account with no lender behind it. The math above applies to you, and retirement should come first.

If you’re at 15% or above, a 529 makes sense for the next dollar. Earnings in the account aren’t taxed when the money pays for qualified expenses under 26 U.S.C. § 529(c)(1). Leftover money isn’t stuck there either. Up to $35,000 can move into a Roth IRA, as Ramsey hosts noted in an October episode. One host put it this way: “We get far more calls with people going into student loan debt than we do I overfunded my kids’ 529 plan.”

How to Help With College Without Raiding Your Future

1. Hit 15% first, then open the 529. Work out 15% of your gross household income. Make sure you’re getting the full employer match. Put whatever is left over each month toward college.
2. Steer family gifts into the account. Grandparents’ birthday and holiday money can go straight into the 529. The tax code treats these contributions as completed gifts to the child under § 529(c)(2)(A)(i).
3. Pay what you can from your budget during the college years. Money you pay toward tuition from your monthly budget while your child is in school works just like money you saved years earlier. You can do it without cutting your retirement contributions.
4. Skip Parent PLUS loans and HELOCs. Parent PLUS loans carry a fixed 9% rate for 2026-27. Starting July 1, 2026, they’re capped at $20,000 per student per year. That debt lands on the person with the fewest working years left to repay it. One Ramsey host called paying for college “optional” for parents, while protecting retirement comes first.
5. Talk about money early and often. On a May 2026 episode, the hosts said setting expectations early is more important than paying the bill yourself. Show your teen what different schools actually cost. Compare in-state tuition, scholarships, and community college before anyone signs a loan.

One thing to monitor is whether the new Parent PLUS cap drives more families to check their retirement savings rate before opening a 529.

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