SmartMoney Blogs

A blog about living in and planning for retirement

Will Kids Ruin Your Chance of Retirement?

Getty Images

Kids aren’t cheap.  A study by the U.S.D.A. found that it costs a typical middle-income family more than $220,000 to raise a child, up 22% since 1960.  And that’s only through age 18. Add in paying for college, and that figure may jump by another $100,000 or so, as tuition costs have skyrocketed in recent decades.  It now costs nearly $31,000 per year for your child to attend a for-profit college full-time, $26,600 for a private non-profit and  $15,600 for a public school, according to data from the U.S. Education Department.

In spite of these staggering costs nearly half of all parents “insist” on paying for their children’s education, according to a new study by MassMutual.  That’s fine — if you’re already saving enough for your own retirement.  But that’s often not the case, says Kevin Paasch, an agent in MassMutual’s Virginia Beach office.  “A lot of parents prioritize saving for the kids’ college over their retirement,” he says. “This may mean you have to work well into your 70s.”

While there’s no one right answer for how to balance the  competing demands of retirement saving and paying for your kids’ college education, Paasch offers this three-step plan as a suggestion:

  • Deal with your debts This is one of the biggest things that gets in the way of having enough money to save for big goals like retirement and your kids’ college, he says.  Look to see if you can cut down on any of your living expenses to free up money to pay off your debts more quickly.
  • Put yourself first Sure, you might feel a little guilty about not handing junior a chunk of change for school, but think of it this way: There is financial aid (scholarships, grants and loans) that your kids can get to help pay for school, but there isn’t financial aid that will pay for your retirement, he says.  So put yourself first – get on a solid path towards funding your retirement before you begin pouring a ton of money into your kids’ school.
  • Make a strategic plan Don’t start pouring money into your kids’ college fund until you’re sure you’re saving enough for retirement. “A lot of people just assume they’ll need 80% of their current income in retirement,” Paasch says.  “There are a lot more variables to saving for retirement than that.” What if tax rates, inflation and interest rates go up?  How are you really planning on living in retirement — do you want to travel often, for example?  Make sure you’re pretty certain you’ll have enough for yourself to retire on before you start writing checks for junior.

To begin planning for retirement, click on the SmartMoney Retirement Planner here.


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 7)

View all Comments »
    • I am incredibly glad that I came accross your blog. As i have look at this blog site article of yours, I could not concur additional. Thanks for the information you share. Unquestionably correct. You’ve got pointed out the key points which should be emphasized. I am searching ahead to looking through your upcoming weblogs. Thanks, Cheers mate!

    • I’m quite glad that I arrived accross your blog. As i’ve look at this blog publish of yours, I could not consent a lot more. Thank you for your information which you share. Certainly appropriate. You have pointed out the primary factors that should be emphasized. I’m looking ahead to looking at your long term weblogs. Thank you, Cheers mate!

    • Hmm it seems like your site ate my first comment (it was super long) so I guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog. I too am an aspiring blog blogger but I’m still new to everything. Do you have any suggestions for newbie blog writers? I’d really appreciate it.

    • It is appropriate time to make some plans for the future and it’s time to be happy. I have read this post and if I could I want to suggest you few interesting things or tips. Maybe you could write next articles referring to this article. I want to read even more things about it!

    • You can have more income and your kids will not ruin that..Taxes are no problem if you have the income. Want more income? Want a six figure income in 3-6 months part time? Well, then folks, call 503 389 2140 (have a large notepad and pen) 24 Htrs. call now. You and your family will be happy you made the call, Listen to the full message

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.