It may seem against your parenting instinct to prioritize your retirement savings on your child’s college fund, but that’s exactly what my husband and I are doing.

I remember when our first Financial Advisor told us: “You cannot borrow for retirement. Your children can get student loans. I was seven months pregnant with my first child at the time and was a little terrified of the responsibility that comes with having a new baby, especially the financial aspect.

Now, two kids and two college savings accounts later, we have continued to follow his advice. Here’s why and how it affected our retirement nest egg.

1. Retirement is expensive and you can’t borrow for it

We think that the average retiree needs a $ 1 million nest egg retire comfortably. This includes health care costs, daily expenses, travel, and any inheritance you want to pass on. This number can be a bit mind-boggling, especially for two young future parents who are just starting out in their careers.

When our financial advisor explained to us what we would need to save each month to meet our retirement goals, we were shocked to learn that we could actually afford my husband’s $ 500 contribution to 401 (k). (which corresponded to 75% by his employer), plus the contribution of $ 500 per month to my IRA.

What we couldn’t afford? Contribute an additional $ 1,000 to fully fund our son’s life 529 education savings plan to cover the cost of a four-year college.

2. Student loans aren’t the end of the world

Sixty-nine percent of 2019 college graduates left school on student loans and left school with an average debt of almost $ 30,000. Of course, no one wants to put their child in debt by the time they take this step, but having a little student debt isn’t the end of the world either.

If your child chooses federal student loans, they will have the added benefits of lower interest rates, income-based repayment plans and maybe even student loan forgiveness. Also, I would much rather have my kids have manageable student debt than be a financial burden on them when I retire.

3. There are other ways to pay for college

We won’t always have to choose between our retirement savings and our children’s college education. We hope to someday be in a financial situation that will allow us to pay for expenses such as books, school fees, perhaps even room and meals from our treasury.

Plus, if we hit our retirement savings really hard and have too much money when our kids are in college (hey, a girl might be dreaming!), We can always reallocate some of our retirement funds to pay for their studies, although we may have to pay a penalty if we take this approach.

University students have other ways to finance their studies, from work-study jobs to off-campus life, to even part-time employment while studying. Not to mention the scholarships and grants they could claim. There are no retirement scholarship programs, and you can’t borrow for them either.

4. Saving for retirement is better for your taxes.

Anyone actively saving for retirement is likely familiar with the tax benefits of retirement savings plans. From reducing your taxable income with a 401 (k) to tax-deferred or tax-free growth with an IRA, the benefits are numerous.

While offering some tax benefits, saving for college in a savings plan like a 529 doesn’t have quite the same impact.

We don’t completely neglect it

We always save for our children’s college, just a lot less than we allocate for our retirement. We contribute about 50% of what we set aside for our retirement to our children’s college funds.

We also have two separate 529 plans. These education savings plans offer great benefits, ranging from tax-free growth to no tax penalty if you use the money to pay for education and control over the custody of the account.

Of course, we are aware of the 10% penalty if a child does not attend college and you want to use the funds for something else. But over the past 20 years, the percentage of students who graduate with a bachelor’s degree increased from 29 to 39%, and it is likely that this number will not increase until our children reach college age.