Planning for Retirement While Raising a Family

When you’re raising a family, the concept of retirement might seem like a long way off. After all, you have more pressing day-to-day expenses to consider, like piano lessons or private school tuition. But if you want to enjoy your family during retirement, it’s essential to have a long-term savings plan. Keep reading to learn about some helpful tips you can use when planning for retirement while raising your family.

Planning for retirement
Image via Flickr by 401(K) 2012

In the day-to-day chaos of raising children, the days might seem like years — but the years feel like days. Before you know it, it’s time to start thinking about how you’ll pay for your child’s college education or their future wedding. Too often, parents neglect their own long-term savings plans because they’re so focused on their children’s financial security. For example, they might contribute to their child’s college fund at the expense of their own retirement account.

On top of that, more people than ever are providing financial support to their elderly parents as people live longer. According to the Pew Research Center, 54% of adults in their 40s and 36% of people in their 50s have a parent older than 65 and a child under 18 or an adult child they support financially. If you fall into this category, you may feel financially strapped as you work to support your family and care for an ageing parent at the same time.

Raising a family

Fortunately, there are steps you can take to provide for your family while also saving some money for your retirement. By proactively planning for retirement, you can ensure you’re able to enjoy those years with your children and (potential) grandchildren. Here are some tips to help you save for retirement while raising a family at the same time.

You can take out a loan for your child’s education, but you can’t finance your retirement in the same way. Make investing for retirement a priority by saving what you can and maximizing your contributions to a retirement plan if you have one.

Education is a big expense, so start saving early if you can. Consider opening a 529 plan for your child and setting up automatic payments to the account so you don’t have to think about it.

When you start thinking about education, retirement, and other major life goals, you might be tempted to put all your savings into those accounts. However, don’t neglect to build an emergency fund for your family so you can handle unexpected expenses like medical care or home repairs.

Many people invest in annuities to guarantee steady income in retirement. When you purchase an annuity, you pay premiums to an insurance company, and in return, you receive fixed payments throughout your retirement. To learn more about annuities visit AnnuityRatesHQ.

Retirement planning

Of course, there are many factors to consider as you plan for retirement. Once you have a family, your focus shifts from yourself to your children and your spouse or partner. Some factors that might be helpful to consider as you plan for your retirement include:

Do you and your spouse plan to live where you do now, or do you want to move to a new location? Where you live can affect your cost of living or even travel expenses to visit your children and their families.

In these uncertain economic times, many parents are providing financial help to their children even after they turn 18. If you want to contribute to your child’s financial security as an adult, you should consider this factor as you plan for retirement.

If you expect your children to grow up and start families of their own, you may want to make sure you have enough in savings to cover your own medical bills or other expenses related to ageing. That way, you can relieve some of the financial burden on your family as you get older.

If you’re in the midst of raising your family, retirement might be the furthest thing from your mind. However, if parenthood teaches you anything, it’s that time goes by fast. Take some steps now to start planning for your retirement so you can live comfortably and make plenty of trips to see your children. With a savings plan in place, you can ensure you have enough money to spend your golden years with the people who mean the most to you: your family.

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