More Filipinos today are marrying later, building careers first before starting families. While this shift offers financial stability before parenthood, it also creates a unique challenge: many parents in their late 30s or 40s will still be paying for their child’s education just as they are preparing for retirement.
According to John Hero Salvaro, a Registered Financial Planner (RFP), this “double burden” requires a new kind of financial planning. In an interview with Financial Adviser PH, he explained:
“It’s not easy to fund your child’s college while also preparing for retirement. But with the right strategy, parents can protect both goals without sacrificing one for the other.”
Here’s how Salvaro suggests tackling the challenge.
Postpone or Redefine Retirement
Parents who start families later may need to rethink the traditional retirement timeline.
“One option is postponing retirement for a few more years,” Salvaro said. “This allows continued income to support daily needs, fund a child’s education, and build the retirement fund.”
He also points out that many companies now extend HMO coverage for employees up to age 65—a benefit worth keeping if you’re considering working longer.
For those unwilling or unable to delay retirement, Salvaro suggests redefining retirement lifestyle goals. “Adjust your forecasted expenses—food, shelter, healthcare, travel, and hobbies. For example, gardening is a low-cost leisure activity that improves wellness, cuts food costs, and even creates income if you sell surplus produce,” he explained.
Look for Extra Income
While cutting costs helps, Salvaro warns it’s limited. “You can only cut expenses so much,” he said. “Earning extra income creates flexibility in the financial plan.”
This can come from side hustles, freelance work, or small business ventures. For parents juggling education and retirement, every peso of added income can strengthen both funds.
Invest Education Funds Conservatively
Many parents assume that because college is 18 years away, they should invest education money aggressively in equities. Salvaro cautions against this.
“Yes, equities can grow wealth, but by the time the child enters college, the parents are nearing retirement. The last thing you want is to pull from retirement savings because education investments underperformed,” he explained.
His advice: place education funds in moderately aggressive allocations like balanced funds. “This way, you still aim for capital appreciation while reducing exposure to market downturns,” he said.
Protect With Insurance
Insurance becomes even more critical for parents who start late.
“An untimely death or a major health issue has a bigger impact in this situation because you’re funding both education and retirement at the same time,” Salvaro said. Adequate life and health insurance ensure that either goal isn’t derailed by unexpected events.
Work Retirement and Education Plans Together
For Salvaro, the most important principle is integration. “Retirement planning should always be done alongside education planning. You cannot separate the two if you start a family later in life,” he told Financial Adviser PH.
He advises working with a financial planner to customize a strategy based on income, lifestyle goals, and family size. “Every household’s numbers are different. A plan that accounts for both retirement and education avoids financial stress later on,” he added.
Final Takeaway
For parents who have children in their late 30s or 40s, the challenge is real—but not impossible.
“Postpone retirement, redefine your lifestyle, find extra income, invest education funds conservatively, and get proper insurance. These steps make the double burden manageable,” Salvaro said.
At the end of the day, he believes late parenthood can still lead to both a comfortable retirement and quality education for children—if families plan early and stay consistent.
