Top 3 Mistakes Parents Make When Saving for College and Planning for Retirement

At Cascade Wealth Planning, we work with many ambitious parents who are doing their best to provide every opportunity for their children, while also trying to stay on track for their own retirement goals. It’s not always easy. The financial pressures of raising a family, paying for education, and preparing for life after work can feel like competing priorities.

But here’s the truth: you don’t have to choose one or the other. With the right strategy, you can invest in your child’s future and your own. The key is avoiding some of the most common missteps we see families make when balancing college and retirement planning.

Here are the top three mistakes we help clients avoid, and how you can steer clear of them, too.

Mistake #1: Prioritizing College Savings Over Retirement

It’s understandable. You want your kids to graduate without debt and have every opportunity to succeed. So you start funding a 529 plan early, maybe even before your child’s first birthday. You funnel extra income into college savings, sometimes at the expense of your own retirement contributions.

But here’s the hard truth, and you may have heard this before, there are no scholarships, grants, or low-interest loans for your retirement.

While it may feel selfless to prioritize your child’s future, putting retirement on the back burner can backfire. If you reach retirement age without enough saved, your children may end up supporting you financially, which undermines the very independence you're trying to give them.

The smarter approach? Make sure you’re meeting your retirement goals first, especially if your employer offers a 401(k) match. Once you're on track, then you can layer in college savings. Think of it as putting on your own oxygen mask before helping others.

Mistake #2: Assuming College Costs Are Set in Stone

Many parents assume college will cost whatever the published sticker price says. They hear a number like $80,000 a year and panic, believing they must save hundreds of thousands by the time their child turns 18.

But the reality is much more nuanced. Few families pay full sticker price. Scholarships, financial aid, tuition discounts, and in-state options can make a dramatic difference. And your family’s financial picture, including income, assets, number of children, plays a major role in how much aid your child may qualify for.

This is where thoughtful planning can give you an edge.

We often help families model out different college scenarios and understand how their income and asset decisions today can affect financial aid eligibility down the road. Planning ahead can open doors to need based aid, merit based scholarships, and using tax smart strategies to pay for college.

Without this kind of planning, families may over-save in the wrong accounts or sacrifice too much of their current lifestyle based on inflated assumptions. Don’t let fear of the unknown drive your decisions, get informed instead and well ahead of time.

Mistake #3: Treating Financial Planning as a One-Time Event

Some parents sit down when their first child is born, open a 529 account, and then set it and forget it. Others wait until their child is in high school and try to play catch-up. In both cases, the lack of ongoing planning can lead to missed opportunities, or worse, financial stress at a critical time.

Life changes. So do college costs, tax laws, financial aid formulas, and investment markets. What made sense five years ago may not serve you today.

That’s why we believe financial planning is not a one-time event, it’s a dynamic, ongoing process.

At Cascade, we partner with families to continually update their plans as life evolves. Whether you’re welcoming a second child, changing careers, inheriting assets, or nearing retirement, we help you adjust course intentionally, so your plan stays aligned with your goals.

The payoff? Greater clarity, more flexibility, and peace of mind, especially when big milestones like college acceptance letters and retirement dates draw closer.

The Bottom Line

As a parent, you want to give your children the best possible future. But that doesn’t mean neglecting your own. The strongest legacy you can leave is one of balance, where your kids are supported, and you enjoy a secure, independent retirement.

By avoiding these three common mistakes, you give yourself and your family a much better shot at long term success.

We’re here to help you make confident, informed decisions that honor both your family values and your financial goals.

Let’s plan for both. If you’re ready to align your college and retirement planning into one cohesive strategy, schedule a call today. We’d be honored to help guide your family forward.

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