A New COVID-19 Fear for Parents: Retiring Broke
A new study out from E-Trade Financial, which was just acquired by Morgan Stanley in a $13 billion deal, has revealed that more parents than ever are worried about retirement. Up to 46% of parents also said childcare is a major concern, which is 6% higher than before the pandemic.
Parents have a hard time preparing for retirement: They’re about 1.4 times more likely to withdraw early from their retirement accounts than the general population. Only 65% reported feeling prepared to retire. Meanwhile, educational costs are among the top reasons that parents dip into retirement savings early. At least 17% of parents report school-related expenses as the top reason they took money from their retirement savings, compared to 10% of the population overall.
Apart from raising politically independent-minded children, I think we also need to raise children who are willing to confront the social-economic challenges that have barred us from reaching our milestones in a timely fashion. Fact; We risk being broke in our retirements.
— PK (@wa_Kabwohe) June 24, 2020
In a statement, Deniz Ozgenc, Executive Director of Financial Product Management at E-Trade Financial, offered parents some encouragement. “As we settle into the new normal, many families face new financial challenges, a lot of unknowns and plenty to juggle.” He offered a few tips:
Plan ahead for surprise expenses by building an emergency fund.
Invest automatically from your paycheck.
Start saving for education as early as possible.
With these tips, families can be better prepared for the future, despite the difficulties of the pandemic.
“Retirement planning doesn’t need to take a backseat amid the chaos,” added Ozgenc. “Savings may seem like a monumental task but setting a little aside now on a consistent basis can set up a solid financial future for the whole family.”
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This article originally appeared on GOBankingRates.com: A New COVID-19 Fear for Parents: Retiring Broke
