Not Ready For Retirement? Don’t Blame It On The Kids

Raising children can make it tough to keep your retirement savings on track.

Haven’t put aside as much as you would like for retirement? Don’t blame it on the kids.

“While having children leads to a moderate increase in the likelihood of being at risk (for retirement), the influence of children is considerably smaller than other factors,” says the Center for Retirement Research at Boston College (CRR).

It’s true that having children does make a dent in your available household income, but only a relatively small one. Researchers estimate that each child reduces household income by about 4% per year, especially in younger families.

Households headed up by older parents don’t feel that much of an income pinch. Each child in older households cuts income by only about 2% per year.

If you feel you’re behind the 8-ball when it comes to retirement planning, there are a few things you can do.

Participating in the 401(k) or pension plan at work will give you a big boost. Proactively saving for your child’s college education, instead of waiting until the last-minute, can also keep you on track.

Here’s the ultimate secret on acing retirement when you’ve got kids in the family, according to Boston College researchers.

You need to spend less on yourself to make up for those extra child-rearing costs if you want to remain on track for retirement. If your total spending goes up once kids arrive and you keep spending at that higher level once you’re empty-nesters, you may be “headed for trouble” say the experts. The rationale? You probably haven’t saved enough to maintain in retirement the standard of living to which you’ve grown accustomed.

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