The Society of Actuaries (SOA) surveyed Americans who are actively saving for both their retirement and their family member's or friend's college education to better understand the challenges that families face. More than half of all respondents (58%), aged 25 – 80 who are of working age or retired, say they have delayed retirement significantly or moderately due to these dual financial goals. Additionally, two-fifths (41%) of retirement/college savers have used retirement funds to pay for the college education of a relative, with the risk of a tax penalty for early withdrawals.

Survey Overview

Ninety-three percent of respondents are saving for their own children's college education, and 66% of Baby Boomer respondents (aged 58 – 76) are saving for grandchildren. Many respondents are also saving for other family members and/or friends. Along with college and retirement, respondents have other savings goals as well. Ninety-two percent are setting aside money for an emergency fund; 87% for travel; and 68% for purchasing a home.

"The challenge of prioritizing different savings goals, including college for family members, has led to families making difficult choices, such as delaying retirement plans," said R. Dale Hall, FSA, MAAA, CERA, Managing Director of Research, SOA Research Institute. "This consumer survey helps identify the underlying challenges individuals and couples face in balancing multiple financial goals, such as funding college education, providing for unexpected financial needs and planning for a secure retirement."

Where Savers and Their Beneficiaries Make Compromises

The survey finds that two-thirds (63%) of respondents have had their ability to save for another's college education impacted by having to save for retirement at the same time. As a result, 40% of all respondents will or have had to take out loans and 16% will or have had to borrow from family or friends to help pay for someone else's college. Furthermore, 39% of all respondents work longer hours and 26% have taken on additional jobs in response to the dual saving goals.

The SOA Research Institute's Financial Perspectives on Aging and Retirement Across the Generations finds that 24% of Millennials and 20% of Gen Xers are experiencing high levels of stress due to debt. Additionally, only 28% of Millennials and 23% of Gen Xers agreed strongly with the statement, "You are on track in planning for a financially secure retirement." Similarly, the SOA Research Institute's 2021 Retirement Risk Survey found that 44% of individuals planning for retirement were concerned about managing finances well enough to have the money they need later in life.

According to this college/retirement savers survey, many college fund beneficiaries also have had to compromise. Nearly half of all the college/retirement savers surveyed say their beneficiaries have experienced a medium or large impact on their college plans as a result of the savers' dual financial goals. Forty percent of respondents report college fund beneficiaries will have to choose a public in-state college over a private or out-of-state college. Thirty-five percent say their collegegoers will have to choose a two-year community college over a four-year institution and 12% report they will postpone going to college.

Survey Methodology

The SOA Research Institute conducted an online survey of 1,000 U.S. respondents, working or retired who both regularly save for retirement and are currently saving at least $500 a year for a relative's and/or friend's college education. Results were weighted to be nationally representative of those regularly saving for retirement and someone else's college education (by age/gender, region, race and ethnicity). The survey was fielded June 6–14, 2023.

About the Society of Actuaries

With roots dating back to 1889, the Society of Actuaries (SOA) is the world's largest actuarial professional organization with more than 32,000 actuaries as members. Through research and education, the SOA's mission is to advance actuarial knowledge and to enhance actuaries' ability to provide expert advice and relevant solutions for financial, business and societal challenges. The SOA's vision is for actuaries to be the leading professionals in measuring and managing risk. Visit www.soa.org.

About the SOA Research Institute

Serving as the research arm of the SOA, the SOA Research Institute provides objective, data-driven research bringing together tried and true practices and future-focused approaches to address societal challenges and your business needs. It provides trusted knowledge, extensive experience and new technologies to help effectively identify, predict and manage risks. www.soa.org/research-institute