November 3, 2011
Many parents putting kids’ college education ahead of own retirement
(Sarah Gambles, Deseret News) — For some parents looking forward to a retirement filled with vacations, gardening, doing family history or moving to St. George, those dreams have been put on hold to fund their child’s college education.
In low-income households, 37 percent of parents placed sending their kids to college as more important than saving for retirement, according to a study by Allianz Life Insurance. Although some view attending and graduating college as a standard for success, Dan Kadlec of TIME Magazine argued that saving for retirement cannot be compromised because time is one of the most essential components that collects a retirement savings program or 401(k).
“Young people can usually get education loans on favorable terms, or they can delay going to college for a few years or choose a lower-cost intitution,” Kadlec wrote. “They have many years to figure it all out. But parents approaching retirement age do not have the luxury of time. Saving money and leaving it to grow is a long process.”
He also said parents might have the best intentions when putting their child’s college education over their own retirement fund, but it may come back to bite the child in the end.
“It may come down to this: Would you rather have your kids end up paying their student loans … or your medical bills?” Kadlec wrote.
Still others agree with Kadlec on prioritizing anything over saving for retirement, like Brian O’Connell of Mainstreet.com. He referred to a study by Mass Mutual that found that 71 percent of parents agree they don’t want their children burdened with caring for them when they’re older.
“American parents, knowing full well their own financial futures are at risk, are doing what they can to ensure their kids get a decent college education – even if it means they raid their own retirement savings to pay for college costs,” O’Connell wrote. More…Posted by: psilberman