Almost two-thirds (60%) of parents with children under 25 have saved less for retirement than they’d planned, finds a CIBC poll. This is because they’ve directed some of their retirement savings towards their child’s education.
As a result, 36% will actually delay retirement. And one-third has incurred additional debt.
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“The expenses associated with a child’s education often come when parents are in their 40s and 50s and are looking to accelerate retirement savings,” says Christina Kramer, executive vice president, Retail Distribution and Channel Strategy, CIBC. “This means some parents will need more working years to close the gap created by the costs of their child’s education.”
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It pays to have a plan and start saving early. To help parents achieve their goals, here are some tips:
- Understand your total financial picture. Look at your debt management and savings plans, and ensure you have accounted for education savings;
- Manage debt effectively. Ensure your mortgage payment and other obligations give you room to allocate money towards savings;
- Use an RESP. Also, take advantage of the Canada Education Savings Grant to build your investment.
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