When it comes to savings priorities, a new study indicates that single parents may be putting their children’s college education ahead of their own retirement. Many employer-sponsored plans may have participants who face this choice, which could have consequences for the plan and its administrators.
Asked about their motivation for developing and executing a long-term financial plan, nearly half (45%) of single-parent respondents identified “saving for my kids’ education” versus 39% of traditional families, according to a new survey by Allianz.
Nor is this merely economics. While it might be natural to expect a single parent household to be more financially constrained than a two-income household, the single-parent family respondents in this particular survey (defined as one unmarried adult with at least one child under 18) had an average annual household income of nearly $85,000 (the study required a minimum of $50,000 for all cohorts) with an average of only 6% of their income coming from child support and nearly two-thirds (64%) receiving no child support at all.
More than three-quarters (76%) of single-parent respondents are worried about running out of money in retirement compared with only 70% of traditional families. As for remedying this situation, less than half of single parents (45%) indicate they know exactly what steps to take to ensure they have a comfortable retirement, compared with nearly six in 10 (57%) of traditional family respondents. About half (49%) of all single parents say they cannot possibly save enough for retirement, though only 37% feel they are putting their financial future at risk to take care of their children.
The Allianz LoveFamilyMoney Study was conducted by The Futures Company via an online panel. It had more than 4,500 panel respondents ages 35-65 with a household income of $50,000, and was commissioned by Allianz.
Asked about their motivation for developing and executing a long-term financial plan, nearly half (45%) of single-parent respondents identified “saving for my kids’ education” versus 39% of traditional families, according to a new survey by Allianz.
Nor is this merely economics. While it might be natural to expect a single parent household to be more financially constrained than a two-income household, the single-parent family respondents in this particular survey (defined as one unmarried adult with at least one child under 18) had an average annual household income of nearly $85,000 (the study required a minimum of $50,000 for all cohorts) with an average of only 6% of their income coming from child support and nearly two-thirds (64%) receiving no child support at all.
More than three-quarters (76%) of single-parent respondents are worried about running out of money in retirement compared with only 70% of traditional families. As for remedying this situation, less than half of single parents (45%) indicate they know exactly what steps to take to ensure they have a comfortable retirement, compared with nearly six in 10 (57%) of traditional family respondents. About half (49%) of all single parents say they cannot possibly save enough for retirement, though only 37% feel they are putting their financial future at risk to take care of their children.
Not surprisingly, more than three-quarters (76%) said that preparing for retirement and their child’s college expenses at the same time causes them a great deal or at least some stress.
The Allianz LoveFamilyMoney Study was conducted by The Futures Company via an online panel. It had more than 4,500 panel respondents ages 35-65 with a household income of $50,000, and was commissioned by Allianz.
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