— Pittsburgh financial adviser Robert Hapanowicz said
his firm has had several clients who put a higher value
on their child’s education than on their own
recall a conversation with a friend/client who had
recently been asked by an acquaintance how he justified
sending his daughter to a private school when other less
expensive options exist," said Hapanowicz,
president of Hapanowicz & Associates.
answer was: ‘I’ll just work a little longer if I
need to. Investing in my children will be one of the
best investments I can make.’"
and grandparents will do the darndest things to make
their children and grandchildren happy, even if it means
putting their own retirement security in jeopardy to
help pay for college.
one-third of Americans would be willing to defer their
retirements to help their children and grandchildren pay
for their education, according to research conducted by
Limra Secure Retirement Institute, based in Windsor,
Conn. The findings are based on a survey of nearly 1,000
Americans in July.
we also found in the survey that surprised me even more
is that over 40 percent of Americans feel it is the
family’s responsibility to help pay for college,"
said Michael Ericson, an analyst and author of the
is what initially surprised me. But it made sense when
we found over one-third of parents and grandparents were
willing to delay retirements or work in retirement to
help with college expenses," Ericson said.
of the things that is worrisome about those findings is
that our research finds about half of Americans are not
able to work as long as they planned."
the cost of college has skyrocketed, Ericson said
Americans are putting less money aside for retirement,
delaying retirement start dates and even carrying debt
into retirement, often due to lending financial
assistance to younger family members in college.
noted, "When you invest in a child’s education,
what you hope for, of course, is a high return in terms
of career opportunities and life fulfillment as the
child progresses into adulthood. For many, if not most
parents, it is hard to put a number on such a result. It
noted the Roth IRA can be a more flexible solution than
a 529 savings plan, although the second is specifically
set up to help people save for college. Roth
contributions, though not tax deductible, can be
distributed tax-free and used to pay for college
expenses, including expenses not qualified via the 529
appears to be a determining factor in what sacrifices
parents and grandparents are willing to make for
college-age family members.
percentage of Americans who say they would be willing to
reduce the amount they are saving for retirement to help
pay for their children’s or grandchildren’s
educations decreases as people get older.
is a generational difference in the people who agreed
that family members have a responsibility to help
students pay for college," Ericson said. "The
younger generations — Generation Y and Generation X
— are more likely to agree with that statement as
opposed to baby boomers and the silent generation.
younger generations are more likely to have experienced
college and the debt that often goes with it," he
said. "They are more likely to want their children
to have the same opportunity they had. The older
generations are more likely to be retired and on a fixed
income, which makes it harder to pay the rising cost of