Are You Using Your Retirement Money to Pay for College?
There’s a saying: “Times are tight, the wallet’s thin.” While that may be true, it doesn’t mean that you should raid your retirement funds in order to pay for your child to go to college. However, according to Sallie Mae, the largest student loan provider in the United States, one third of parents dip into their retirement savings to pay for college. Sallie Mae’s report, “How America Saves For College”, found half of the parents surveyed were focused on college savings. A greater number, 60 percent, were fixed on saving for retirement.
The harsh reality is that while parents are looking to save for their retirement years, more than seven in ten families with teenagers (that’s 74 percent) would use their retirement for college. Many parents are taking loans on their retirement funds or withdrawing nearly $6,500 on average.
CNBC takes a closer look at the Sallie Mae survey and the state of paying for college in their article for DailyFinance. Paying for a child’s education is a goal most parents work toward achieving, but when it comes to risking their financial future help put sons and daughters through college, it may not be worth the trade off.
Note: The Sallie Mae report, “How America Saves For College”, is a PDF, so you will need Adobe® Reader® in order to view it.
