Study: Parents Saving to Fund Kids’ Education, Not Retirement
Most Children Believe Parents Should Fund Their Education
New York, NY — More American parents are saving money to fund their kids’ education than for their own retirement, according to T. Rowe Price’s “2016 Parents, Kids & Money” survey.
About 58% of those parents surveyed said they have saved money toward their kids’ college tuition than they have saved money toward their own retirement, about 54%.
About 76% of parents said they’d be willing to delay their retirement to pay for kids’ college education, while 68% said they would be willing to get a second or a part-time job to help foot the education bill.
In addition, parents are sometimes using their own retirement accounts to pay for those college credits. About 27% of parents are using either a 401k or an individual retirement arrangement (IRA) to save for their kids’ college, the study says. (Source: “Parents put kids’ college savings above retirement, study says,” Benefits PRO, August 4, 2016.)
A majority of children believe their parents will cover all college costs for them, according to T. Rowe Price’s 2016 Parents, Kids & Money Survey. In addition, 62% think parents will foot the bill no matter which academic institution they decide to attend, according to the report, which surveyed 1,086 parents nationally as well as their 8- to 14-year-old kids.
Many parents are falling in with this entitlement attitude, with 63% agreeing with the statement, “I feel guilty that I won’t be able to pay more for their college.” But only 35% of parents will be able to cover most of their kids’ college bills, and just 12% said they will be able to pay the whole college bill.
With the average cost of tuition and fees for the 2015–2016 school year $32,405 at private colleges, $23,893 for out-of-state students at public colleges, and $9,410 even for in-state students at public colleges, according to the College Board, many parents simply can’t afford to provide the level of support their children expect or that they might want to give.
About 42% of parents agree with the statement, “I lose sleep worrying about college costs,” up significantly from the 28% of parents who felt that way in 2014, the study says. (Source: Ibid.)
While 67% of kids say their parents are saving for their college, 23% of those have parents who said that they are actually not saving for their children’s college.