Parents putting off retirement to pay for kids’ education
TORONTO—A poll commissioned by CIBC says many Canadian parents are delaying their retirement and taking on debt to help put their children through school.
Of 1,000 Canadian parents with kids under 25 surveyed by Leger Marketing, 36 percent said they’ve had to postpone their retirement due to their children’s post-secondary education costs.
A third of respondents said they’ve taken on additional debt to help pay for their kids’ tuition and other expenses.
“Many Canadians are focused on building retirement savings or reducing debt, but the costs you can incur when helping your children with college or university can impact both of those goals,” said Christina Kramer, an executive vice-president at CIBC.
“The expenses associated with a child’s education often come when parents are in their 40s and 50s and are looking to accelerate retirement savings,” she noted.
“This means some parents will need more working years to close the gap created by the costs of their child’s education.”
Kramer said the earlier parents can start planning for their kids’ education, the better.
She recommends working with a financial adviser, managing debt effectively, and using a Registered Education Savings Plan, or RESP, to build up savings.
“It can be a challenge for parents who are trying to turn the corner on their own debt to borrow more to help pay for tuition bills,” Kramer noted.
“Which is why it’s so important to talk to an adviser and build education costs into your long-term plan when you still have time on your side and pay down other debts.”