T. Rowe Price’s 2016 Parents, Kids & Money Survey found that many children (62%) expect their parents to cover the cost of “whatever college I want to go to.”
While most parents are saving for their children’s college education, the survey found they may not be using the most appropriate type of account to save. Forty-two percent are using low-interest savings accounts, and 27% are using retirement accounts that penalize savers for withdrawing money before retirement. Only 37% of parents are using a tax-advantaged 529 plan to save for their children’s college education.
More than two-thirds (67%) of parents surveyed said saving for their children’s college education is more important than saving for retirement.
More than three-quarters (76%) of parents would be willing to delay their retirement and 68% would be willing to get a second or part-time job to pay for children’s college education. In addition, while 58% of parents said they had money saved for their children’s college education, fewer (54%) indicated they had money saved for their retirement.
The survey sampled 1,086 parents of eight- to 14-year-olds nationally. Additional research findings may be found here.