Top young athletes dream of winning Olympic gold and receiving college scholarships, but many parents who invest in their children’s activities do so while doing grave damage to their own retirement savings, shows a new body of research.
The new study was commissioned by TG Ameritrade and utilized information given by 1,001 parents of first-class athletes, writes Charisse Jones for USA Today. The typical family polled was paying $500 a month for their child’s athletics, and 33% of the parents said they were not putting money aside for their retirement. Fifty-seven percent said they did not have a long-term financial plan.
“It’s natural that parents are going to want to support their children’s athletic dreams,” says Carrie Braxdale, managing director of investor services for TD Ameritrade. “But it’s also important that they not sideline their own financial goals.”
Many parents of award-winning athletes are not saving for college, in some cases because they think their child is likely to get a scholarship. Sixty-seven percent of the participants hoped their child would receive a tuition allocation, but in reality, only 24% did.
Also, 34% of the parents believed their child would qualify for the Olympics, but just 2% did so. Braxdale commented that there is a disconnect between optimism and reality.
The father of Damion Thomas, Jr. says his family spends thousands of dollars annually toward his son’s track competitions. Damion, a hurdler, has been picked as a possible 2020 competitor. Damion’s father says if his son’s future is better because of his skills, then all the self-denial will have been worth it. He adds that he and his wife could be doing better on increasing the funding of their retirement account.
Braxdale advises parents to plan their financial futures in the same way they have approached their children’s athletic endeavors:
“Setting goals, having a plan around how to get there, and leveraging coaches and tools to help you really derive the best outcomes.”
The poll showed, according to Business Wire, that competitive youth sports does have its drawbacks, such as the expenses, the loss of personal time, and having to concentrate on one child to the detriment of any other kids in the family.
Where their young people are concerned, parents say the disadvantages for competing in sports are the potential for burnout, the considerable time commitment, and the possibility of injuries.
Most parents added, however, that the benefits of youth sports outweigh the sacrifices. Those benefits include learning value, increasing confidence, and practicing a regular exercise regimen. Parents say they benefit from watching their children excel in athletics and bonding with them over this shared activity, writes Matthew Rocco for Fox Business.
Braxdale explains that the answer is not to exclude sports in children’s lives. But she does point out that parents with whom she has talked say they wish they had maintained a better balance between saving for retirement and spending on their children’s athletic activities.
Alicia Adamczyk, reporting for Times, Inc., quoted Braxdale on the need for parents to take a fresh look at their financial commitments:
“The survey highlights a real need for sports parents to get on track with a financial plan, especially considering that only a small percentage of young athletes secure a scholarship or turn pro, but 100% of parents will need a nest egg.”
A recent GoBankingRates survey discovered that one-third of Americans do not have any retirement savings. This number is equivalent to the number of parents with athletically-inclined children who say they are not regularly putting aside retirement savings.