A new survey says more of us are saving for our kid’s college fund than our own retirement. Oh, snap! I’m not pointing any fingers, but the data is pretty damming…What I’m curious about is WHY people choose to save for college instead of retirement. Maybe you can help me understand this issue.
Are you saving for retirement or college?
How you prioritize saving depends on your age
Millennials (ages 18 to 34) are the most likely to prioritize financing their children’s education ahead of their own retirement. In fact, 60 percent of Americans in that age group said saving for their kids’ education was more important to them, compared with 43 percent of GenXers (ages 35 to 54) and only 28 percent of Baby Boomers (ages 55 and older). Our very own Dacia Daly is bucking that trend by saving for retirement at age 23.
The irony is that if millennials started saving for retirement in their 20s, they would need to save much less money over their lifetime in order to retire comfortably. Money grows over time, so the longer it has to grow, the bigger it gets.
How you prioritize saving also depends on your household income
Why save for college instead of retirement?
Perhaps the idea of saving for retirement is too overwhelming. Easier to save for college – which is coming up sooner than retirement – and has a very specific number attached to it. Use this super simple college expense calculator, which factors in entry year, to estimate how much college will cost. My only problem with this college calculator is that it doesn’t differentiate between public and private schools, and 2- and 4-year schools.
Why save for retirement instead of college?
Are you saving for retirement – or college?