3404: [Part 1] The Greatest Risk To My Retirement Goal by Craig Stephens of Retire Before Dad on Securing Your Future

Summary

Podcast Episode Summary

Podcast: Optimal Finance Daily
Host: Diania Merriam
Episode: 3404: [Part 1] The Greatest Risk To My Retirement Goal by Craig Stephens of Retire Before Dad
Date: December 29, 2025

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Episode Overview

This episode features part one of Craig Stephens’s article, “The Greatest Risk To My Retirement Goal,” from Retire Before Dad. The theme revolves around early retirement ambitions and the financial risks associated with paying for children’s college education. Craig reflects on how his family's multigenerational commitment to funding college shapes his financial planning, highlighting the trade-offs between retirement goals and educational savings. The episode concludes with Diania’s commentary on the complexities of parents funding their children’s education versus prioritizing their own financial independence.

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Key Discussion Points & Insights

1. Craig’s Retirement Ambition

• Personal Benchmark: Craig aspires to retire before his dad did, targeting age 55—nine years earlier than the current average retirement age for men in the US (64).
  • “It seemed natural to me that in order to live better off than my parents, I should retire before them.” (01:16)
• Family Milestone Timing: His planned retirement year aligns with his eldest child starting college, creating a direct financial challenge.
  • “That same year, a major family milestone will become a reality...it’s the year the oldest of our two children will start college.” (02:32)
• Identified Risk: The biggest risk to this goal, as of now, is whether he and his wife can save enough for both retirement and their children’s college.
  • “As of today, I see this as the biggest risk to reaching my retirement goal.” (02:54)

2. Family Values and The Cost of College

• Parental Example: Craig’s own tuition was paid by his parents, a privilege he now realizes as crucial to his financial head start.
• ROI of College Decision: In retrospect, he acknowledges not factoring return-on-investment (ROI) into his college decision, suggesting an in-state school would have provided the same benefits at a lower cost.
  • “When I chose my college I did not consider the return on investment, that is the return measured in cumulative salary after graduation on the investment, cost of tuition, living expenses, etc.” (04:04)
  • Example Calculation:
    • Out-of-State: $100K cost, $250K five-year earnings = 150% ROI
    • In-State: $75K cost, same earnings = 233% ROI
  • “Simple math, right? Not to a stubborn 18 year old. This is crystal clear now that I’m older and wiser.” (05:07)
• Multi-Generational Commitment: Craig describes his family tradition as the “generational tuition payment two-step.” Each generation pays for the next, ending student debt for future family members.
  • “By choosing to pay for both his and his kids’ education, he made it possible for all future generations in our lineage to pay for just one generation of education.” (05:38)

3. Privilege and Perspective

• No Student Debt Advantage: Craig acknowledges his privilege—having no student loan debt allowed him to aggressively save and have life experiences like travel after college.
  • “Having no student loan debt gave me the freedom to work and diligently save upon graduation, which led to the incredible opportunities to travel.” (06:06)
• Parental Sacrifice: Now as a parent, Craig recognizes the sacrifice involved and commits to providing the same for his children, making college savings a focal point of his family’s financial plan.
  • “Most importantly, college education savings is now a cornerstone of our family’s financial plan.” (06:23)
• Challenges Ahead: He ends by foreshadowing the difficulty, despite careful planning: “Unfortunately, the math tells me that saving for college will be no waltz.” (06:32)

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Host Commentary: Diania Merriam’s Perspective (08:53)

Parental Approaches to College Funding

• Community Observations: Diania notes contrasting philosophies among FIRE (Financial Independence, Retire Early) community parents—some feel responsible to pay, others do not.
  • “I meet a ton of people in the FIRE community that often discuss this question of saving for college for their children. I find that there are two parents: those who feel it’s their responsibility to pay for college and parents who have no intention to pay for it.” (08:53)
• Her Own Background: Diania benefited from a full scholarship and some loans, gaining pride in funding her own way, but noticed that some students didn’t value their education when parents paid for it.
  • “I remember being annoyed in school by the kids who didn’t value their parents covering the costs of their education...perhaps if they had to cover it themselves, they wouldn’t change majors five times.” (09:15)
• Cost Realities: She notes that current college costs often make total self-funding unfeasible, but paying even part of one’s own way could prompt greater consideration of ROI.

Retirement vs. Education Funding

• Priority Caution: Diania urges listeners to prioritize their own retirement security over wholly funding children’s education.
  • “If paying for college is going to risk your own retirement or put you further into debt, perhaps it needs to be considered further. Your child can take out a loan for school. You, however, cannot take out a loan for your retirement.” (09:47)
• Final Food for Thought: She reminds that while it’s admirable to provide early support, there’s no guarantee your adult children will be able to support you later if you sacrifice your own financial future.

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Notable Quotes & Memorable Moments

• Craig Stephens (on ROI of college choices):
  • “When I chose my college I did not consider the return on investment...The point I want to make...is that by choosing an in state school I would have received the same degree at the same career jumpstart but a much better ROI.” (04:04–05:01)
• Craig Stephens (on privilege):
  • “You may hear my blog and think, well this guy didn’t have any student debt, so no wonder he was able to travel the world and save so much for retirement. You’d be right. It was a colossal privilege.” (06:03)
• Diania Merriam (on retirement first):
  • “Your child can take out a loan for school. You, however, cannot take out a loan for your retirement.” (09:51)

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Key Timestamps

• 01:04 – Introduction: Craig’s retirement ambition and why it’s important
• 02:32 – Intersection of retirement and kids’ college timeline
• 04:04 – Discussion of ROI on college choices
• 05:38 – The family tradition of tuition funding
• 06:06 – How lack of student debt shapes opportunity
• 06:32 – Acknowledgement of the challenge ahead
• 08:53 – Diania’s commentary on college funding philosophies
• 09:47 – Caution: Don’t risk your retirement for college savings

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Flow & Tone

• Craig’s Tone: Reflective, candid, and slightly self-critical with a focus on practical family finance and generational lessons.
• Diania’s Tone: Empathetic, pragmatic, and motivational, encouraging listeners to assess personal priorities realistically.

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Conclusion:
This episode thoughtfully examines the real-world tension between ambitious early retirement goals and the responsibility (and privilege) of funding one’s children’s education. Through both Craig’s personal experience and Diania’s nuanced commentary, listeners are encouraged to weigh long-term family financial planning, consider the ROI of major expenses, and prioritize their own retirement security while shaping the future opportunities for their children.

To be continued in the next episode…

Transcript

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[Craig Stevens / Optimal Finance Daily Host]

This is Optimal Finance Daily the Greatest Risk to My Retirement Goal Part 1 by Craig Stevens of Retire Before Dad.com More Than a decade ago, when my dad retired from his teaching career at age 56, I told him my retirement goal was to beat him and stop working at age 55. It seemed natural to me that in order to live better off than my parents, I should retire before them. I reject the notion that because younger generations are statistically more likely to live longer than our parents, we'll need to work longer. According to a recent study by Alicia H. Monnell at the center for Retirement Research at Boston College, the average age of retirement for men in the US is 64. For women, it's 62. These averages haven't changed much in the past 10 years. My retirement goal of age 55 is not extreme like some other stories you'll find out there, but it's still nine years ahead of the average retirement age for men. It's a realistic retirement goal for me and my life situation, but it will still be quite a challenge when I retire. I don't plan to work another day the rest of my life. Just like my dad, I'll turn 55 in 2030. That same year, a major family milestone will become a reality. It's the year the oldest of our two children will start college. My wife and I have committed to paying for our kids undergraduate college education. If we don't save enough by the time they start school, I may need to keep working to cash flow the balance. As of today, I see this as the biggest risk to reaching my retirement goal. My College background, My parents paid for the undergraduate education of both me and my sister. My dad has always said it was the best investment they ever made. I argue that it could have been even better. You see I went to an out of state school. I received a quality education but at a more expensive price than was necessary. Had I gone to a similar quality university that was in state and less expensive, the return on my parents investment would have been higher. They generously offered to pay for any college I chose to attend. My dad went to college but didn't have a lot of options or resources when he chose a school. He obviously wanted me to go in state but didn't push it because he wanted the decision to be mine. All my parents asked for in return was that I work to cover living expenses, graduate it in four years and do the same for my kids college education someday. I was stubborn in high school and wanted to go to an out of state school because that was my idea of adventure going off to a place where I didn't know anyone. In hindsight it would have been nice to see a few familiar faces from high school. When I started my freshman year. College was a very positive experience and gave me the education I needed to start a lucrative career. But truth be told, I could have received my finance degree somewhere else for a lower price. When I chose my college I did not consider the return on investment, that is the return measured in cumulative salary after graduation on the investment, cost of tuition, living expenses, etc. Using very simplified numbers and a five year period. A basic ROI calculation for college works like this. Total cost of tuition and expenses $100,000 cumulative five year earnings after college $250,000 five year return on college 150%. Obviously there are many additional variables that could be applied here such as major reputation of the school, grades, potential earnings without a degree, etc. The point I want to make, a point that I completely ignored when I selected a college, is that by choosing an in state school I would have received the same degree at the same career jumpstart but a much better ROI. Altering the example using $75,000 as the cost of tuition and earning the same five year salary, the ROI increases to 233%. Simple math, right? Not to a stubborn 18 year old. This is crystal clear now that I'm older and wiser. Since my parents were paying, I didn't grasp the reality of the equation. They certainly did, but they still let me make my own decision. The Generational Tuition Payment two step My dad paid his own way through college and graduate school funding it by working laborious jobs over the summers and student teaching. A few decades later, he and my mom paid for their two kids college education. He performed a generational tuition payment, two step double duty so to speak. By choosing to pay for both his and his kids education, he made it possible for all future generations in our lineage to pay for just one generation of education. My wife and I will pay for our kids education and they'll pay for their kids education and so on. You may hear my blog and think, well this guy didn't have any student debt, so no wonder he was able to travel the world and save so much for retirement. You'd be right. It was a colossal privilege. Having no student loan debt gave me the freedom to work and diligently save upon graduation, which led to the incredible opportunities to travel. Now that I'm a parent, I more clearly realize the dedication and sacrifice it took to make it happen. Most importantly, college education savings is now a cornerstone of our family's financial plan. This will provide our kids the same freedom and opportunities I had upon graduation. Unfortunately, the math tells me that saving for college will be no waltz to be continued. You just listened to part one of the post titled the Greatest Risk to My Retirement Goal by Craig Stevens ofretirebeforedad.com.

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[Craig Stevens / Optimal Finance Daily Host]

Of people in the fire community that often discuss this question of saving for college for their children. I find that there are two parents who feel it's their responsibility to pay for college and parents who have no intention to pay for it. I personally feel that I benefited from paying my own way when it came to school. Now take this with a grain of salt because I got a full academic scholarship and took out loans for living expenses. But I do have a sense of pride in figuring it out for myself and I always thought that if I did have kids, I'd want them to have a similar experience. I remember being annoyed in school by the kids who didn't value their parents covering the costs of their education. Perhaps if they had to cover it themselves, they wouldn't change majors five times or they would put that degree to work in a higher paying field versus staying at their restaurant job. I know I'm oversimplifying, and as someone who graduated college in 2009, I recognize how hard it is to get an entry level position in a tough economy. It can be argued that the cost of higher education these days makes it impossible for young people to pay their own way, but perhaps if they had to pay for at least some of it, they'd be forced to consider the return on investment of that education. Look, if you do decide that it's important to you to pay for your child's education, I would just encourage you to first make sure that you're set on your own financial goals. If paying for college is going to risk your own retirement or put you further into debt, perhaps it needs to be considered further. Your child can take out a loan for school. You, however, cannot take out a loan for your retirement. It's great to help your offspring get a good start to their adult life, but who's to say they'll be in a financial position to help you when you're in your elder years? And that should do it for today. Have a happy rest of your day and I'll see you tomorrow where we'll finish up this post and where your optimal life awaits.