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Data and Research September 22, 2017
Parents Sacrificing Retirement Savings to Pay for Children’s College
Children’s education is the second most common reason parents tap retirement savings, a survey found.
Reported by Rebecca Moore
T. Rowe Price’s 2017 Parents, Kids & Money Survey, which sampled parents of 8-to-14 year olds nationally, revealed that parents are still willing to scale back their retirement in order to cover their children’s college education.
Similar findings have been reported in previous T. Rowe Price surveys.
More parents are saving for their children’s college than their own retirement: 53% of parents are saving for their children’s college and 49% are saving for their own retirement. In addition, the study found parents are willing to delay their retirement to cover college costs: 73% of parents agree with the statement, “I’d be willing to delay my retirement to pay for my kids’ college education.”
Parents are more likely to pull money from retirement savings than college savings: 44% of parents have pulled money from their retirement savings over the past two years compared with only 32% of parents who have pulled money from their children’s college savings during that time span. Children’s education is the second most common reason parents tap retirement savings: 33% of parents who have pulled money from retirement savings in the past two years did so to cover their children’s college education. This is the second most common reason selected behind paying off debt (35%).
Fourteen percent of parents anticipate pulling money from their retirement to cover their children’s college costs.
The ninth annual T. Rowe Price Parents, Kids & Money Survey, conducted by Research Now, was fielded from January 18, 2017, through January 26, 2017, with a sample size of 1,014 parents and 1,014 kids ages 8 to 14. A summary of findings can be found here.