August 26, 2009
Parents Juggle Retirement and College Savings Strategies
Parents Juggle Retirement and College Savings Strategies
Edward Jones Survey Reveals Nearly a Third of Americans Are Saving Equally for Retirement and Child's College Education
ST. LOUIS, MO--(Marketwire - August 27, 2009) - As more Americans delay starting a family until later in life, more are finding themselves in a troubling financial dilemma -- how to pay for a comfortable retirement and put their kids through college at the same time.
A new study by financial services firm Edward Jones found that nearly a third of parents (29%) have it covered and are saving equally for retirement and their child's college education. Approximately another third (31%) are favoring one over the other and 26% aren't saving for either. The survey, which reports on parents' savings strategies, showed that younger parents ages 35 to 44 are more likely to save equally for retirement and college education (37%), than older parents ages 55 to 64 (23%).
The study of 1,497 parents, which was conducted by Opinion Research Corporation on behalf of Edward Jones, revealed men are slightly more likely than women to save equally for both retirement and college (31% and 27% respectively), while a higher percentage of women (29%) revealed they are not saving at all for retirement or their child's education, compared with 23% of men. More respondents are choosing to only save for retirement (22%) rather than just their child's college education (9%). The survey also showed 37% of parents ages 18-34 are not saving for retirement or college at all.
"It's encouraging that close to a third of those surveyed recognize the need to save for both because, for more and more people, retirement and paying for college are simultaneous events," said Greg Dosmann, a principal with Edward Jones. "Unfortunately, it appears far too many people haven't yet adopted strategies to meet both goals. And it's complicated by the happy fact that people are living longer and the sobering fact that the cost of college is increasing far faster than the rate of inflation."
Geographically, the South (32%) had the highest percentage of respondents who said they're saving equally for retirement and college, compared with only 22% of respondents in the West. Americans who live in metro areas are more likely to save for retirement over college, while those in non-metro areas are choosing college savings over retirement (22% and 12% respectively).
Differences in household income also had an impact on responses. Higher earners are primarily saving for retirement (33%) over saving for their child's college education (10%). Not surprisingly, higher earners are more likely to save equally for both retirement and college than lower earners. Nearly half (44%) of respondents who make less than $35K/year are not saving at all.
Based on educational history, college graduates are more likely to save equally for both retirement and their child's college education than high school graduates (40% and 24% respectively). Forty percent of high school graduate parents are not saving at all, compared with only 12% of college graduate parents.
About Edward Jones
Edward Jones provides financial services for individual investors in the United States and, through its affiliates, in Canada and the United Kingdom. Every aspect of the firm's business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm's 12,000-plus financial advisors work directly with more than 8 million clients to understand their personal goals -- from college savings to retirement -- and create long-term investment solutions that emphasize a well-balanced portfolio and a buy-and-hold strategy. Edward Jones embraces the importance of building long-term, face-to-face relationships with clients, helping them to understand and make sense of the investment options available today.
Edward Jones, which ranked No. 2 on FORTUNE magazine's "100 Best Companies to Work For 2009," is headquartered in St. Louis. The Edward Jones Web site is located at www.edwardjones.com, and its recruiting Web site is www.careers.edwardjones.com.
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* Survey was based on 1,497 telephone interviews of US adults and was conducted between the dates of July 23 - 27 and July 30 - August 3. The margin of error was +/-3%.
Contact:
John Boul
Manager, Global Media Relations
Edward Jones
314.515.3265
314.276.4419
