Paying For College Takes Precedence Over Retirement
Posted on January 10th, 2006
The trend of saving up for your golden years seems to be turning…from saving for retirement to saving for your child's college expenses.
Many financial advisors don't agree with this path, but this doesn't seem to be changing people's minds.
From
The Journal Star:
All those reports about the rising cost of a college education appear to be having an impact on the savings patterns of American families.
A survey finds that parents with children under age 18 are more concerned about saving for their children's educations than they are about saving for retirement.
The survey found that 37 percent of the more than 1,100 parents who were interviewed said saving for college was of primary concern, compared with 34 percent who said retirement was their top financial concern. The rest said that saving for a house, car or other major purchase was most important.
The cost of sending children to college has been rising fast in recent years. According to the latest survey from the college board, a nonprofit association based in Washington, D.C., tuition and fees at four-year private institutions rose nearly 6 percent to $21,235 for the 2005-2006 academic year from $20,045 in 2004-2005, while costs at four-year public institutions went up more than 7 percent to $5,491 from $5,126.
Most financial advisers urge families to save first for their own retirement and then put money aside for their kids' education, arguing that families can borrow to fund college but not retirement.
But Heywood said this conflicts with parents' aspirations for their children.
"People hear that and they say, 'Too bad about retirement savings; my kids are going to college."See, your parents really do care about you! Perhaps you could show your appreciation by making the Dean's List?
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