The Society of Actuaries (SOA) conducted a fresh survey revealing that 66% of individuals from the baby boomer generation, aged between 58 and 76, have seen their retirement savings goals affected by their desire to save money for their grandchildren’s college education.
Approximately 66% of baby boomers surveyed mentioned actively saving to support their grandchildren’s college education. Among all respondents aged 25 to 80, encompassing both working individuals and retirees, 58% reported a moderate to significant delay in their retirement plans because of these financial objectives.
Furthermore, the survey revealed that 41% of those saving for both retirement and college expenses have made the conscious decision to utilize funds originally designated for their retirement, thereby exposing themselves to potential tax penalties associated with early withdrawals, all to support a family member’s college education.
In addition to managing their own financial priorities, respondents also disclosed that they are saving to support other family members and/or friends with their financial objectives. Apart from this, the survey highlighted various savings goals respondents are actively pursuing, including an emergency fund (92%), travel expenses (87%), and home ownership (68%).
The survey results indicate that a significant proportion of respondents (63%) have experienced difficulties in saving for someone else’s college education while simultaneously saving for their own retirement. Consequently, 40% of all participants either plan to or have already taken out loans, and 16% have had to rely on financial assistance from family or friends to support the college expenses of others. Moreover, 39% of the participants decided to extend their working hours, and 26% took on supplementary jobs to handle the complexities of pursuing both saving goals at once.
The survey involved 1,000 respondents from the United States, all of whom are either currently employed or retired. These individuals are actively saving for their own retirement and are setting aside a minimum of $500 annually to support the college education of a family member and/or friend.
The study’s outcomes were adjusted to achieve a nationwide representation of those who regularly save for their retirement and contribute to someone else’s college education. This adjustment considered factors such as age, gender, region, race, and ethnicity. The survey was carried out between June 6th and June 14th, 2023.