Americans Willing to Sacrifice Retirement Benefits for their Child’s Education

According to a new survey, most of the American parents expect to pay for the college fees of their kids by sacrificing their own retirement benefits plans. The survey also revealed that parents of young kids were also willing to take up an extra job to pay the college fees and many Americans saved for kids’ education before saving for their own retirement. Financial experts are warning the parents to not take these sorts of emotional steps as they may regret later.

Research on Retirement Benefits and Student Loans

The research on retirement benefits and student loans was done by a Baltimore-based financial firm, Rowe Price Group Inc. The respondents of the survey were about 1086 households. The survey gave an insight on how much the parents are willing to sacrifice in order to educate their kids.

The Key Findings

As per the survey about three-quarters of parents who have children between the ages of 8 to 14 were willing to postpone their retirement and the retirement benefits plans savings to pay for the college costs of their children. Around 68 percent of the respondents also admitted that they would be willing to get a second job to ensure that their children get proper education. About 69 percent of the parents preferred putting money away for their child’s education rather than their own retirement. Financial advisers say that taking such a step would wreak havoc on the finances of the entire family.

Some More Findings

About 42 percent of the parents admitted that they were losing sleep when they think of the college costs of their kids. About 3 percent of the parents were guilty about their inability to pay more money to support the education of their child.

Outstanding Student Loans

It seems that the parents are right for worrying over the student because as per the Fed in Washington, Americans collectively owe 1.4 trillion dollars in outstanding student loans and about 90 percent of it is owned or guaranteed by the federal government.

The Sad Fact

People who have to pay these student loans often have to sacrifice necessities like medical treatment and even buying groceries. Some even delay their marriage. In such a scenario, the fact that parents are sacrificing their retirement benefits to ensure that the student loan amount of their kids’ education is reduced is sad but not irrational.