You Can’t Get a Loan for Retirement: Why Late Starters Should Fund Their Own Future Before College Savings

1 day ago 3

Don Lair

Wed, May 27, 2026 astatine 4:33 AM CDT 5 min read

On the Catching Up to FI podcast, big Bill Yount delivered a enactment that should reframe however late-start savers deliberation astir household budgets: "you can't get a indebtedness for retirement." His follow-up is the portion astir parents flinch at. "Your fiscal independency is simply a acquisition to your children for their ain fiscal independence," helium said, due to the fact that the alternate is simply a taxation your kids wage aboriginal successful the signifier of supporting you.

The stakes are concrete. If you are successful your 50s with a bladed 401(k) and you redirect savings into a 529 plan, you whitethorn manus your kid 4 years of tuition and a 30-year work to subsidize your retirement. Pick one.

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Late-start savers successful their 50s should prioritize backing status implicit assemblage savings, arsenic status has nary fiscal assistance options portion students tin borrow, work, oregon transportation credits; a 50-year-old earning $90,000 with $120,000 saved needs to scope a $900,000 people by 67 and tin seizure astir $360,000 successful 401(k) catch-up contributions from property 50-63 earlier marketplace returns.
Parents who redirect status savings into 529 assemblage plans hazard leaving their children financially obligated to enactment them later, making self-funded status the astir invaluable inheritance a late-start saver tin provide.
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The verdict: Yount is right, and the mathematics is brutal

Late starters should money status first. The crushed is that status has nary fiscal assistance office. A pupil tin borrow, work, transportation credits, oregon use for scholarships. A 67-year-old with $38,176 successful median 401(k) savings (Vanguard's 2025 figure) cannot.

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Run the numbers connected a 50-year-old earning $90,000 with $120,000 saved. Fidelity's line says they should already person 6x wage by property 50 and 10x wage by property 67. That is simply a $900,000 people astatine 67 against a $120,000 starting point. To adjacent that gap, the 50-year-old needs to usage each catch-up instrumentality the IRS offers.

The 2026 limits marque this imaginable if you commencement now. The modular 401(k) worker deferral is $24,500. At property 50, the catch-up bumps the full to $32,500. From ages 60 to 63, SECURE 2.0's ace catch-up lifts it to $35,750. IRAs adhd different $7,500, positive an $1,100 catch-up astatine 50.

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