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How to pay for college as a retiree

Alyssa Pry
Personal Finance Reporter

For some retirees, retirement no longer means just golfing and travelling to visit grandchildren. While that can be part of their retirement experience, many retirees are heading back to school to pursue passions they’ve always wanted to explore after a long time in the workforce, says Stephen Stabile, senior vice president at Merrill Lynch.

“When it comes to retirement, it comes down to what is important to them, what is purposeful, and what they want to do in retirement,” Stabile says. “A big part of that is having the opportunity to go back and study and learn something new.”

Many of his clients look to study passions they want to learn more about, now that they have the time. Stabile works with clients to make a financial plan to return to school, and his clients are pursuing programs in horticulture, music, foreign languages, real estate and entrepreneurial and business programs. Some choose to start their own businesses later in life and want the education to back up their new path.

But deciding to go back to school—at any age—requires thought and financial planning. Stabile shares his tips for those who want to pursue education in retirement.  

  • Make a financial plan

Stabile says before anything else, you need to have a financial plan in place.

“You cannot make decisions in terms of retirement, in terms of anything, without a financial plan: that’s your foundation,” he says.

Once you know how much money you have, you can decide how to allocate it and how much you have to spend on education costs.

“If you have a fixed level of income in retirement or a fixed level of assets, I would take that financial plan and see what happens if you dedicate $20,000-$40,000 to your studies,” Stabile says.

  • Have retirement funded first

Make sure your retirement is funded before you decide to go back to school. Look at your accounts and decide if you can maintain your lifestyle throughout retirement before you start taking money out to pay for college courses.

“Your retirement accounts are created with a purpose—it’s tax-deferred growth and the last thing you want to do is start to withdraw money from your retirement account to pay for college,” he says. Withdrawing money before you’re eligible can force you to pay taxes and penalties which will take value away from your savings.

  • Do your research

There are many options available for retirees and older students that won’t require you to spend a lot—but you have to do your research.

Many colleges—even Harvard— offer free or reduced tuition for students over 65—you can find a full list of free or reduced-cost programs in each state here. Stabile also recommends searching online for educational programs offered by entrepreneurs. These programs can help you gain knowledge or even work towards a degree.

Stabile himself is a returning student: while not yet a retiree, he’s currently in an MBA program at The Sloan School of Management at MIT, which is just the start of his educational goals for the future.

“I could see myself in my 70s going back to get my PhD,” he says. “I don’t ever see myself not continuing to learn.”

  • Find ways to fund your education  

Stabile recommends opening up a 529 education plan for yourself to fund your education.

“The way that a 529 works is that you put in and contribute post-tax dollars today and the monies grow tax-deferred until used for college,” Stabile says.

Using a 529 can help you fund college for yourself, and any unused money can be passed down to your children or grandchildren to fund their educations.


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