A new study from the Center for Retirement Research at Boston College analyses the impact having and raising children has on the ability to save for retirement.
Keeping in mind the expense connected with the raising of children, households, according to the report, could employ one of two “lifecycle” methods to put money aside for retirement.
“One option is for parents to keep household consumption steady over time, but sharply curtail spending on themselves when they have children at home. The other is to have households plan for higher consumption while the children are at home and lower consumption when the children leave and then in retirement.”
The problem with this thinking, the authors continue, is that “households may not behave optimally; they may increase household spending when they have children and maintain spending at that elevated level even after the children leave home. In this case, households with children may be less prepared for retirement than those without.”
The report, The Impact of Raising Children on Retirement Security, uses the National Retirement Risk Index (NRRI) to assess the impact of having children on the retirement security of today’s older working households.
More: Data reveals significant challenges to securing adequate retirement income.

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