If you're not raising kids in retirement, you don't have to worry about having enough money to retire—so there's no retirement crisis.
That's according to Andrew G. Biggs of the American Enterprise Institute, who said in a recent blog post that parents don't have the same expenses in retirement that they did during the years they were raising their children, so it's far easier to "maintain the same standard of living in retirement that you had during your preretirement years."
Biggs pointed out that financial planners look to replace just 70–80 percent of working-years income during retirement, instead of 100 percent, because "many costs that exist during your working years … disappear once you retire. Paying off your mortgage is one. Contributions to your 401(k) are another. As are job-related costs, such as commuting, meals and work clothes."
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Child-rearing costs disappear, too, Biggs said, and considering that that cost amounts to $248,000 (plus college costs), that's a big chunk of income that doesn't have to be replaced. He said, "If you're a parent, your material standard of living simply isn't as high as that of a childless individual with the same income. They're spending more of their income on themselves, while you pay for diapers, Gameboys, school clothes, and the rest. But you knew that."
In fact, Biggs said, "If you're a parent who's satisfied with your current standard of living, it won't cost as much to replicate it once you reach retirement." While assuming that the latter may certainly be true, betting that there's no retirement crisis on the question of whether parents are sufficiently satisfied with their standard of living during childrearing years to keep that standard in retirement may be disingenuous.
In addition, while he cites a single study finding that "that parents are just as happy and financially secure in retirement as non-parents," there are numerous studies indicating that people continue to support their adult children in retirement and are postponing their retirement because of the expenses involved in helping out with their kids' bills and even college tuition.
In addition, many aren't even able to save enough to get the full employer match in their plans, much less put away enough to retire on anyway, whether or not they're raising children—sometimes because of the kids' student loans and sometimes because of their own
While it's true that it's easier to retire if you're not supporting the kids, it's a little premature to declare that there's no retirement crisis.
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