How LA Families Can Plan for Private School Without Derailing Retirement

Living and raising a family in Los Angeles means facing big decisions, and private school is often one of them. The academic programs, sense of community, and smaller class sizes can feel like the right fit, but the financial reality can be hard to ignore. With private school tuition in Los Angeles now averaging $25,000 to $50,000 per year and often much higher, many established families still feel the strain.

A common question I hear is:
How do we give our kids the best education without putting our own future at risk?

It’s not an easy balance, and there isn’t one right answer. But with a thoughtful plan, it’s possible to support your child’s education and protect your family’s future without feeling like you’re constantly choosing one over the other.

Understand the Real Cost of Private School in Los Angeles

Before committing to private school, it helps to look beyond the published tuition. Most schools in Los Angeles charge between $25,000 and $50,000 per year, depending on grade level, but the actual cost is typically higher.

Books, uniforms, after-school programs, field trips, and “suggested” annual giving can easily add 10 to 15 percent. And because tuition tends to rise 4 to 6 percent each year, what feels manageable in kindergarten can double by high school.

Thinking of private school as a long-term cash flow commitment rather than a year-to-year decision allows you to plan intentionally and preserve flexibility for other goals.

Keep Retirement at the Center of Your Financial Plan

When faced with a large recurring expense like tuition, it can be tempting to redirect savings from longer-term goals. But pausing or reducing contributions to retirement and tax-deferred plans can have lasting consequences.

For many of the families I work with, this includes maximizing contributions to employer plans such as a 403(b), 457(b), or cash balance plan, as well as continuing after-tax savings strategies like backdoor Roth or taxable brokerage accounts. These vehicles provide compounding growth, tax advantages, and flexibility that are difficult to replace later.

Prioritizing your future doesn’t mean putting yourself ahead of your children. It means ensuring long-term stability for your family and preserving the independence to make choices later in life on your own terms.

Model the Tradeoffs Before You Commit

Every family’s situation is unique, which is why seeing the full financial picture before making a decision is so valuable. Modeling tuition scenarios within your broader financial plan helps you understand how private school may affect retirement readiness, travel goals, charitable giving, or future college funding.

Cash flow projections or Monte Carlo simulations can reveal whether tuition fits comfortably within your plan or if adjustments are needed.

If you’re unsure, consider a “trial year.” Set aside the expected tuition amount in a separate account for twelve months. It’s a practical way to test how the expense affects your savings rhythm and day-to-day comfort before making a long-term commitment.

Smart Strategies to Help Afford Private School

Once you decide that private school aligns with your family’s values, the next step is to create a structure that keeps it sustainable.

• Align variable income with tuition. Consider designating a portion of annual bonuses, RSUs, or deferred compensation payouts toward tuition to avoid pressure on monthly cash flow.

• Create a dedicated education fund. Use a short-term investment or high-yield savings account specifically for tuition. Keeping this separate from your core investment portfolio helps maintain clarity and discipline.

• Understand 529 plan limitations for K–12 expenses. While federal law allows up to $10,000 per student per year for private school tuition, California does not conform to that rule. Withdrawals for K–12 expenses are subject to state tax and potential penalties on the earnings portion.

• Leverage family gifts wisely. Grandparents or relatives can provide annual gifts of up to $19,000 per person, or $38,000 per couple, in 2025 without triggering gift-tax reporting. These gifts can help with tuition or be directed to savings for future goals such as college.

• Be tax-aware. Evaluate whether dependent care FSAs or charitable deductions tied to school giving can provide offsetting tax benefits.

Matching investment time horizons to tuition timing is essential. Use conservative options for near-term payments and growth-oriented strategies for longer-term education or family goals.

Stay Grounded in What Matters Most

It’s easy to get swept up in school tours, applications, and comparison conversations, especially in a city like Los Angeles. But behind every financial decision is a personal one. Taking time to reconnect with what matters most to your family can bring perspective and peace to a process that often feels high stakes.

Ask yourselves: What do we hope our child gains from this experience? For some families, it’s an environment that fosters creativity and confidence. For others, it’s a sense of belonging, academic rigor, or exposure to new opportunities. There’s no universal right answer.

When your financial choices align with your values, the numbers start to feel less stressful and the decisions more intentional. Clarity about why you’re choosing a certain path makes it easier to navigate the financial tradeoffs with confidence.

The Takeaway: Finding Balance for Your Family

Private school can be a meaningful investment in your child’s development, but it shouldn’t come at the cost of your peace of mind. Finding balance means giving yourself permission to prioritize both your child’s growth and your own long-term security.

With thoughtful planning, Los Angeles families can invest in education today while preserving the financial independence that supports their future. If you’re considering private school or already managing tuition payments, now may be the right time to revisit your plan and make sure your family’s decisions today reflect the life you want for tomorrow.

Quick Checklist for Families Considering Private School

✅ Understand your all-in tuition and fees

✅ Review retirement and deferred compensation contributions

✅ Model the financial impact before committing

✅ Establish a dedicated education account

✅ Revisit annually as tuition and goals evolve

Disclaimer: The blog post is for general informational purposes only. This article is not intended to be a substitute for specific financial, tax, or legal advice. Reproduction of this material is not permitted without written permission.