In a recent survey, financial services provider Allianz discovered that single parents were more likely to save for their children's college education than to save for their own retirement, according to Kaitlin Krassell writing for USA Today.
Nearly one-half of those responding declared that their children's education was their primary reason for developing a long-term financial plan. This was in contrast to 26% of modern families and 39% of traditional families who said the same.
"We find that a little disturbing because there are grants, scholarships and student loans to pay for education â¦ you can't get a loan â¦ or a scholarship for retirement," says Katie Libbe, vice president of consumer marketing and solutions at Allianz Life.
â¢ 65% of single-parent families receive no child support.
â¢ Traditional families (married, heterosexual couples with at least one child) averaged a$113,000 income.
â¢ Modern families (boomerang, multi generational, same-sex ) averaged $101,000 in household income.
The single parents involved in the survey, says Libbe, were not representative of the standard income for single parents. Most single parent families will usually have an income that is closer to poverty level. Those surveyed had to have a minimum income of $50,000.
"For single parents, it's a family-first mentality," Libbe says. "They're struggling as the sole decision maker in the family, and they're putting their own financial futures at risk."
One surprising outcome of the survey was the finding that parents were talking with their children about the cost of college and all the other associated costs involved in higher education. And this, says Libbe, is a good thing. This makes children understand about planning for a specific goal and how much is involved in being able to attend college.
The other side of the coin is that if children attend college through the use of a student loan, they will be leaving with a substantial debt. If students leave college with debt, they, too, will be putting off saving for retirement, which, in effect, will create a cycle of "non-retirement savers".
Pew data from 2011 said that there were 8.6 million single moms and 2.6 million single fathers, says Sabrina Bachai writing for ThinkAdviser. He adds that the national median for single-mother families is $23,000. Single-fathers have higher salaries and are less likely t be living at the poverty level.
"Single parents are forced to solve the retirement equation by themselves, which places tremendous pressure on their ability to find the right balance between saving for their children's college expenses and saving for their own future," said Allianz Life Vice President of Consumer Insights Katie Libbe. "Because they are on their own, single parents often lack the flexibility to address multiple goals, and therefore tend to have a more narrow focus on their savings priorities."
Business Wire writes that although single-parents are choosing to save for their children's education, 76% say they are worried about their ability to have enough money saved for retirement. Sixty-two percent say they are savers, rather than spenders.
â¢ 45% of single-parent say they know the steps to having a comfortable retirement
â¢ 57% of traditional families say they understand the steps
â¢ 49% say there is no way that they can save enough for retirement.