It’s hard being a parent, and it can be especially hard on your retirement planning when you throw a global pandemic into the mix, according to a new study.
The COVID-19 pandemic is having a significant impact on the retirement savings of parents in particular, according to results announced today from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors.
Nearly half of parents (46%) said childcare is a barrier to retirement—a 6 percentage point increase since Q1, before the pandemic, and parents were 20 percentage points higher than the total population.
The percentage of parents who feel prepared to retire in the event of an unforeseen circumstance dropped 8 percentage points from the first quarter to 65%.
Almost half of parents (45%) say they have dipped into their retirement accounts early, compared to just 32% of the total population. Education costs were cited as the top reason to withdraw early. Nearly one in five parents (17%) who have taken early withdrawals from their retirement accounts said education costs were the main reason, compared to just 10% of the total population.
“It’s human nature for a parent to prioritize children over their own financial wellbeing, but in practice they can best help their children’s financial futures when they create a solid financial foundation for themselves,” said Deniz Ozgenc, Executive Director of Financial Product Management at E*TRADE Financial. “As we settle into the new normal, many families face new financial challenges, a lot of unknowns, and plenty to juggle. But retirement planning doesn’t need to take a backseat amid the chaos. 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.”
This wave of the survey was conducted from July 1 to July 9 of 2020 among an online US sample of 873 self-directed active investors who manage at least $10,000 in an online brokerage account.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
