How College Costs Impact Baby Boomers’ Retirement PlansBy Audri Taylors, UniversityHerald Reporter
The desire of parents to pay for their children's college education may be a noble goal, but it affects their financial goals and retirement plans just to send their sons and daughters to college.
According to KMOV, the Consumer Financial Protection Bureau says that the average student loan debt for borrowers who are more than 60 years of age reached $23,000 for the year 2015. This is double the amount several years ago.
Crystal Oculee, a personal finance expert and author, said that this kind of debt can be staggering for baby boomers because it can impact their retirement plans. Some of their colleagues and other friends are ready to enjoy their retirement while they are torn between the decision of working longer or taking a part time job.
A 2013 study also suggests that parents would normally just resort to raiding their retirement funds just to pay their children's skyrocketing college expenses, according to CNBC. And this entails a number of negative consequences like having the withdrawn money taxed, and reducing the financial eligibility the following year.
Oculee explained that this is something that many parents voluntarily do because they only want their children to have a bright future and stable employment, and these things can be achieved by earning a degree. While college enrollment is on the rise, many parents definitely do not want their children to get left behind, and they would be willing to do everything, even sacrifice their own income and retirement, just to make that happen.
However, some financial experts disagree with the idea, because while this is something that most parents would be inclined to do, they advise that it may not be a responsible and wise decision because first, a college degree is not a guarantee to a lucrative job, and second, their children have longer years to pay off these loans.