I was set to retire early at 55 — until my daughter’s $100K tuition bill hit. Should I put my dream on hold?

Early retirement is a goal for many people, but is it worth leaving your child to pay their own way through university just to retire early? That’s the situation Angie is facing.

While hypothetical, this situation is something many parents may face when trying to set their children up for their future and ensure a less burdensome financial hit. Angie has been saving with the goal of retiring at 55, but her plans may be shifting now that her daughter is asking for help with university tuition. Covering the full cost of her daughter’s medical program — over $100,000 — would likely delay retirement by about five years. Angie currently earns around $150,000, and she and her husband spend about $65,000 annually on their mortgage and everyday expenses. Additionally, her retirement savings are carefully budgeted to sustain that lifestyle.

If Angie helps her daughter with her tuition, it will upend that retirement budget and jeopardize the future she and her husband have worked toward. They want to support their daughter but are looking for a middle ground.

Here are the factors they can explore before Angie makes a decision.

The cost of student loan debt

Student loan debt comes at a heavy cost — and not just the amount owed. The average student loan debt balance for a student in a doctorate program is $38,200 per student, according to a 2024 report on student debt published by Statistics Canada (1). Starting adulthood with this debt can impact a graduate’s lifetime earnings, hindering major life milestones and limiting their financial flexibility.

The Canadian Centre for Policy Alternatives (CCPA) found that the average student debt burden results in delayed home ownership for graduates by 4.5 years, on average (2). This means less home equity and lower savings for people approaching retirement age. While the organization doesn’t place a specific dollar value on the total loss of lifetime wealth, its findings say the debt causes significant and long-term financial strain and insecurity.

For Angie's daughter, avoiding six figures of debt could make a huge difference for her finances long-term. But Angie must seriously contemplate whether taking on that burden would mean jeopardizing her own financial security in her later years.

Sponsored

Smart investing starts here

Build your own investment portfolio with CIBC Investor’s Edge online and mobile trading platform. Enjoy low commissions on trades and special pricing for active traders, students and young investors.

Get started today

What to consider when paying for a child’s education

There is no right or wrong answer here — it’s a personal decision that Angie and her husband need to make based on their own situation. Here are a few important considerations:

• The family’s financial situation: Can they cover tuition without draining retirement accounts? Pulling from savings risks missed growth.
• Health: If Angie or her husband face health challenges, early retirement might shift from a want to a need. This could impact their retirement portfolio by having to rely on it for daily financial needs a lot earlier.
• Job security: If Angie loses her job, she may struggle to fund her daughter’s education and keep up with her own expenses and savings.
• The student's track record: Has their daughter shown the commitment and academic performance needed to succeed in a demanding medical degree program?
• Earning potential: Medical doctors typically earn higher salaries, which makes repaying student loans more manageable. Angie might consider letting her daughter borrow the money instead of giving it to her outright.

Working through these factors can help the family make the right decision in their specific situation. While some might consider retiring early selfish, not every parent is able or willing to cover the entire cost of their child’s education, and that’s okay.

How parents can provide support

One of the missing pieces of this conversation is that helping a child through university isn’t an all-or-nothing proposition. Parents can support their children in other ways, such as:

• Let the student live at home to save on housing: Room and board make up a large portion of post-secondary costs. Your child could save tens of thousands of dollars over several years if they commuted to school from home. Parents covering food and basic expenses can keep loan balances low, allowing the student to focus on their studies.
• Look for alternative sources of financing: Data from Statistics Canada’s Postsecondary Student Information System (PSIS) (3) shows bursaries, grants and scholarships provide significant funding for students.
• Cover part of the tuition: Angie could commit to paying a portion of the tuition — say $10,000 a year — while her daughter finances the rest with scholarships, grants or loans. That way, her daughter avoids the full burden of debt, but Angie can also stay on track for retirement.

Sponsored

Take control of your money with Monarch

Simplify your finances with Monarch, the all-in-one app designed to help you budget, track spending, and hit your goals faster. For a limited time, get 50% off your first year with code WISE50.

Start your free trial today

Finding the middle ground

There’s no easy answer, but the middle ground may be the best option: Provide partial support, look into scholarships and financial aid and have open conversations about money. Angie’s daughter might also explore universities, international programs or other lower-cost options to try and make the most financially responsible decision.

Most of all, Angie needs to sit down with her daughter, go over the numbers honestly and create a plan that protects both their financial futures.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Statistics Canada (1); CCPA (2); StatCan (3)