Saving for college hurts retirement for nearly 60%, survey says

investmentnews.com:

Planning for retirement and saving for college are increasingly becoming competing priorities — and many parents are staying in the workforce longer because of it.

Among people age 25 to 80 who are saving for both of those causes, 58% say they are delaying retirement “significantly or moderately due to these dual financial goals,” according to results of a survey published Wednesday by the Society of Actuaries.

And it’s not just that people are putting less into their 401(k)s and individual retirement accounts IRAs — 41% of the 1,000 respondents said they’ve taken early withdrawals from those accounts to help pay for college for relatives. Additionally, 40% of people are taking out loans or planning to in order to pay for a child’s education, with 16% doing so by borrowing from family or friends.

Those financial demands have led more than a quarter of people to work second jobs (26%) or put in longer hours at their primary jobs (39%).

Most of those surveyed are also funding emergency accounts (92%), putting money aside for travel (87%) or saving to buy homes (68%), according to the Society of Actuaries.

These competing demands can help show the value of good financial advice, according to several advisors. One of the common responses that financial professionals had to the survey results is that people should be careful about the decision to delay retiring in order to help pay for college. While students can borrow to help pay for school, the same isn’t true for retirement, advisors said.

In identifying a college savings strategy, it’s important to first assess clients’ core values, Eric Roberge, CEO of Beyond Your Hammock, said in an email.

“In having these conversations, we also often realize that paying 100% of a