Protect the retirement floor before writing the tuition check

Mitchell Kraus, who co-founded the Santa Monica, California, registered investment advisor Capital Intelligence Associates with his father, sees the college-versus-retirement dilemma all the time, and the families who bring it to him share a shape: enough income to disqualify a child from need-based financial help but not enough to cover tuition without doing real damage to the parents' own retirement savings. Kraus's summary of the trap is the cleanest line in the conversation: "A lot of Americans have enough money to do anything they want but not everything they want," he said, "and there have to be some tough choices."

The advice industry usually frames this as an allocation question—how much toward the children's education, how much toward the parents' retirements—but the dollars that decide the outcome are rarely new savings at all. Families are choosing which existing balance sheet absorbs a four-year expense that arrives while the parents are still working yet close enough to the end of earning years that any amount subtracted now has little time to grow back. That is a decumulation decision, and it keeps getting argued as a savings one.

The case for treating college as the emergency and retirement as the residual rests on a chart with two very different slopes. Average tuition rose 312.4% between 1963 and 2025 after adjusting for inflation, according to the Education Data Initiative, and that six-decade number anchors most client conversations about college costs. Since 2010 the same measure has still outrun inflation, but by only 0.92% once inflation is accounted for, and tuition and fees for the 2025-26 academic year grew 3.3% year over year for in-state students and 3.7% for out-of-state students at ranked public schools, according to U.S. News and World Report.

Both readings are accurate and describe different markets. The 312.4% covers six decades, while the increases since 2010 are far smaller, which suggests the escalation was largely banked in earlier decades and that a parent underwriting a bill today faces a much flatter trajectory than the headline number implies. The college side of this tradeoff is routinely overstated next to the retirement side, because retirement is the half of the ledger with no way back. An advisor who helps a client make a permanent cut to retirement funding in order to avoid a stretch of increases in the low single digits has the trade backwards.

John Pantekidis, general counsel and a managing partner at Boston-based TwinFocus, is blunt about the sequencing rule. "To me, it's more important that mom and dad's retirement is fully funded, especially if they're older, especially if they're not as healthy, where they can't work as much — whereas a young person, if they have to get in debt to go to college, they're young, and they can pay it off."

The logic turns on the two borrowers' options, not on which generation deserves the money. A graduate has decades of earnings ahead and the ability to restructure a bad first plan; a parent near the end of a career has neither, which is why Pantekidis follows the point to its endpoint. If clients do run out of retirement funds, they can ask their children for help, but that is not a guarantee. "How about if the kids now don't want to help mom and dad?" he asked. "Now mom and dad are in a pickle."

He has seen the endpoint up close: clients who did legacy planning with other firms, he said, later found they had given too much to their children's trusts and now lack the money to maintain their own lifestyles, so they are asking the children for money. In one case, he said, "the kids are playing tough." The lesson is not that generosity is a mistake, but that a gift made before the parents' own funding requirement is quantified is a commitment with an optional repayment schedule.

Pantekidis's own description of the work — "an analysis of the details, the facts and circumstances of each case" — is the right answer and a difficult sentence to open a meeting with, because a family that has already decided to protect the child will hear the caveat as permission. None of the three advisors here treat college as the automatic first claim on a household's cash; the sequence they lay out runs one way: fund the parents' retirement to their own standard of living, then size the college number against what remains, then settle how much of the difference the student carries.

Travis Poodiack, co-founder of Keene, New Hampshire-based Birch Financial Group, argues that college should stop being a default and moves the conversation to the person who will hold the degree. "We always tell clients and the children to view higher education as an investment," he said, meaning the cost goes to the student as well as the parents: this is what the investment is going to cost.

Poodiack's move changes who is negotiating, which is why it matters. A parent deciding alone is choosing between two abstractions; a family that has priced the degree with the student in the room is negotiating over a purchase, and that student is the one holding the cheaper borrowing option in Pantekidis's calculus. Kraus supplies the timing, pushing the conversation to when the children are young, the only point at which the answer can still be "this much college, funded this way" rather than "this is the bill, where does it come from."

There is a version of this arithmetic the industry already runs on other assets. As this publication has reported, banks in the art-lending market will typically advance 40% to 60% of appraised value, and the tax math often favors borrowing over selling, with high specialty-loan costs the reason the strategy stays at the bottom of most liquidity playbooks. Tuition has the same structure: a large, dated obligation and a choice between liquidating a long-horizon asset and financing the expense. The discipline should carry over: price the borrowing leg before selling anything, treat the liquidation of retirement assets as the expensive option rather than the easy one, and stay current on the terms attached to the borrowing side—the same report points readers to coverage of new student loan repayment rules, a reminder that this leg of the tradeoff is governed by rules that change.

The last mile of retirement is an income and health-cost problem rather than a savings problem, and it starts here, years earlier than most practices notice. A parent who funds tuition out of the retirement pool is drawing down an income floor the household will need later. The gray-zone families in Kraus's practice will not get an easy answer; they will get a better one if the first question is what the parents' retirement has to be worth before anyone writes a college check, and the second is how much of the difference the student carries.