When it comes to savings priorities, a new study indicates that single parents may be putting their children’s college ahead of their own retirement.
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. In terms of 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/some stress.
The Allianz LoveFamilyMoney Study was conducted by The Futures Company via an online panel in January, 2014 with more than 4,500 panel respondents ages 35-65 with a household income of $50,000, and was commissioned by Allianz.
