Another recent survey, this one from the Society of Actuaries (SOA), found that a significant percentage of American workers and retirees are sacrificing their retirement security to pay for a family member’s or friend’s college education.
More than half of all respondents (58 percent) aged 25 to 80 who are of working age or retired said they have delayed retirement significantly or moderately due to these dual financial goals. Additionally, two-fifths (41 percent) of retirement/college savers have used retirement funds to pay for the college education of a relative, with the risk of a tax penalty for early withdrawals.
“The challenge of prioritizing different savings goals, including college for family members, has led to families making difficult choices, such as delaying retirement plans,” said R. Dale Hall, FSA, MAAA, CERA, Managing Director of Research, SOA Research Institute. “This consumer survey helps identify the underlying challenges individuals and couples face in balancing multiple financial goals, such as funding a college education, providing for unexpected financial needs, and planning for a secure retirement.” Read the full report.