36% of all Americans have less than $1,000 saved for retirement

[Marionnette]

Much of that is housing. An extra bedroom - or two - in your house adds a lot to the costs.

Surprisingly very little of it is daycare - my kids are teenagers - and a decade ago daycare for two was $20k.

In our case, it also meant moving from one home in a mediocre school district to a more expensive home in an excellent school district. The house cost more and the taxes are much higher, but our children got an excellent education. Had we not had kids, we might have still moved but to a more affordable area and into a smaller house than we currently own.

Another thing that gets overlooked is the impact that child-raising can have on your career. You may take time off in order to be an at-home parent while the kids are small. Or you might turn down a promotion because it means relocating the family or working hours that are unsuitable for your family life. Those forms of "lost income" are often attributed solely to the fact that you have children.

 

[Gumbo4x4]

According to a CNN study from last August, the average cost to raise a child from birth to age 18 in 2012 was $241K+. That's more than $20K per year and it does not include paying for a college education or any expenses incurred after the child turns 18.
http://money.cnn.com/2013/08/14/pf/cost-children/

Actually, that's more like $13,300 per year, but that requires nearly $20,000 in salary to end up with $13,300 "take home" pay.

I really notice it on vacation. When I was single I used to have to pay for one of everything. Now, with a wife and 2 kids, it's 4 of everything LOL.

 

[pryncess527]

No disrespect, but you really have no idea until you have children. If my dh and I just had a mortgage and student loans we'd probably not know what to do with all the extra money. Kids bring tons of pleasure and tons of bills, many unexpected. When your a family of two, you really have no idea.

All the more reason to save early and get in the habit. It doesn't have to be all or nothing, every little bit helps.

And honestly, kids are all the more reason to plan for retirement. I'm so grateful that I know my mother has planned well providing me with the resources we will need to care for her as she ages.

 

[trinchick]

In our case, it also meant moving from one home in a mediocre school district to a more expensive home in an excellent school district. The house cost more and the taxes are much higher, but our children got an excellent education. Had we not had kids, we might have still moved but to a more affordable area and into a smaller house than we currently own.

Another thing that gets overlooked is the impact that child-raising can have on your career. You may take time off in order to be an at-home parent while the kids are small. Or you might turn down a promotion because it means relocating the family or working hours that are unsuitable for your family life. Those forms of "lost income" are often attributed solely to the fact that you have children.

Yes yes yes to all of this. We moved to a much bigger house in a quieter neighborhood within an excellent school district - tripling the cost of our home.

From a career perspective, I have cut back to four days a week with the associated loss in pay. My responsibilities did not change so I'm essentially doing a full time job in four days (plus additional work at home after the kids go to bed). And despite all that, there is a perception in the office that I'm a "part-timer" which I think has an unspoken impact on my growth here. I love my employer's flexibility (I'm often late due to day care drop off, etc.) plus our free parking in a city is a huge perk in case I have to run to school to pick up a sick kid (can't rely on public transportation). So I haven't even considered looking for a new position despite the fact that I'm confident my qualifications would garner a significant increase in pay elsewhere.

And I can't pooh-pooh the cost of daycare. I can't find a part time slot so am paying for full time care but only using 4 days/week. This is an expense of more than $1000 per month. My older DD who is no longer in day care does have expenses associated with school, extracurriculars, summer camp, etc. but these don't come close to the monthly, year-round costs of day care.

Despite these gripes, I know how very fortunate I am to be able to work a shorter work week and afford child care in which I feel very confident.

 

[crisi]

All the more reason to save early and get in the habit. It doesn't have to be all or nothing, every little bit helps.

And honestly, kids are all the more reason to plan for retirement. I'm so grateful that I know my mother has planned well providing me with the resources we will need to care for her as she ages.

Yes.

I love my mother in law, I really do. And we are fortunate to be able to help out. But it annoys me to make my own sacrifices now because she didn't make sacrifices then. And there were certainly times in her life that she couldn't afford to save - when she was first divorced and my husband was a kid - which is one of the reasons that we DO help. But there were other times in her life where she could have put SOMETHING aside.

One of the most stressful times for people is if they hit that point where their parents are elderly and their own children are teens or young adults - and they are squeezed financially from both ends providing help.

 

[Njord]

Much of that is housing. An extra bedroom - or two - in your house adds a lot to the costs.

Surprisingly very little of it is daycare - my kids are teenagers - and a decade ago daycare for two was $20k.

That was cheap. We live in a MCOL to HCOL area. My husband's coworker pays $1200 a month for one infant, so already $14400 for the first year alone.

 

[crisi]

That was cheap. We live in a MCOL to HCOL area. My husband's coworker pays $1200 a month for one infant, so already $14400 for the first year alone.

It was a decade ago - longer - $1600 a month - $20k a year - for two though.

Only $10k a year - (my kids are 14 and 15) each.

 

[KennesawNemo]

I just looked at my YTD spending on Mint.

23% of our expense were on kids (DS8, DD1). That includes daycare, after school care, kids activities, some diapers and formulas, some clothing, some supplies. I say "some" because I didn't break each of my shopping/grocery trip into kids vs. non-kids.

Not included are medical cost, college savings, extra grocery, extra travel cost and etc.

And yes, the opportunity cost of having kids. I turned down a job offer last year which would give me an 8% raise, because it wouldn't allow me to balance work and life.

Spending on our house is only 27%. It would cost even less if we didn't move into our current house last year for a better school. It doubled our mortgage.

I am not complaining here. We can afford to live like this by being frugal on many other aspects. I am just trying to say, kids are not cheap. LoL

 

[katyjeka]

My only point was to save as much as possible before you start your family. I'm glad my dh and I did so, as it is more difficult now. Our rule is to always pay savings first, and we have always considered this our first bill of the month. Its not easy, but possible.

 

[yooperfan]

This is shocking to me.
Even my 23 year old, who is still a full time student, never worked full time, and never made more than minimum wage has a little more than $1,000 in her ROTH IRA.


http://www.usatoday.com/story/money...retirement-confidence-survey-savings/6432241/

From your description, your 23 yr old is not yet fully self supporting, not really a fair comparison. There are 23 yr olds who have families trying to make ends meet, let alone save for retirement. Unfortunately, you can have 2 jobs and barely be able to make it. It used to be, if you had a job, you could at least make ends meet. Not everyone can be a doctor or lawyer, that doesn't mean they shouldn't be paid a livable wage a hard days work.

 

[crisi]

I just looked at my YTD spending on Mint.

23% of our expense were on kids (DS8, DD1). That includes daycare, after school care, kids activities, some diapers and formulas, some clothing, some supplies. I say "some" because I didn't break each of my shopping/grocery trip into kids vs. non-kids.

Not included are medical cost, college savings, extra grocery, extra travel cost and etc.

And yes, the opportunity cost of having kids. I turned down a job offer last year which would give me an 8% raise, because it wouldn't allow me to balance work and life.

Spending on our house is only 27%. It would cost even less if we didn't move into our current house last year for a better school. It doubled our mortgage.

I am not complaining here. We can afford to live like this by being frugal on many other aspects. I am just trying to say, kids are not cheap. LoL

Though plenty of people raise kids on a fraction of what some of us do.

A friend of mine is a teacher - now working part time. Her husband is a community organizer. They don't make a lot of money - and have three kids.

Her kids have never had their own rooms. Her house is old (her husband is very handy), and not in a prime real estate area that you'd choose for excellent schools. Their travel is mostly camping. Their retirement is her teachers pension. Her kids college will be grants and loans. There was no daycare - they cobbled together her husband's, her mother's and her father's flexible jobs. She doesn't even own a dryer - she washes and then hangs everything. Kids do activities that are free through the community.

Average over 18 years for a middle class family is around $250,000 - or something around $14k a year. But if you have your kids share a room, don't move into a better district, don't travel, have a daycare arrangement that is free (another friend who still has a toddler has a mother that watches him every day), don't put your kids in activities, buy second hand clothes and feed your family frugally, its a lot less than that.

 

[yooperfan]

About 15%-16% of our population is below the poverty line, so I'm sure that contributes to that 36%. Though the article does state 36% of workers, not Americans in general, so maybe that skews numbers? Bah, don't listen to me, I was a history major.

Interesting article though, thanks for sharing.

There are a lot of people who put in a 40 hr work week and are still below the poverty level. Gotta love our "minimum wage".

 

[KennesawNemo]

Average over 18 years for a middle class family is around $250,000 - or something around $14k a year. But if you have your kids share a room, don't move into a better district, don't travel, have a daycare arrangement that is free (another friend who still has a toddler has a mother that watches him every day), don't put your kids in activities, buy second hand clothes and feed your family frugally, its a lot less than that.

I agree, it could cost a lot less. It is a personal choice, I fully understand.

My point is if you don't save when you are young and have no kids, it'll only get harder when you do.

 

[Shelly F - Ohio]

I would be worried sick if that is all I had in the bank. From the time I started my first job I started the envelope system. I label each envelope such as gas $20 a month, car insurance $15 a month, money to have fun with $25 a month and money to deposit into the back - which was what was left over. . It really got me in the habit of saving and budgeting.
Today I am a person who hates to spend money. If we have to make a big purchase like a dishwasher, I research and price match and negotiate what is the best offer but my DH has to make the purchase because it makes me hyper. I never grocery shop without coupons. When I got engaged we both went to our payroll dept and arranged to have $75 a month of our pay used to buy savings bonds. Which we planned to use for our wedding. Its been 17 years and we have only used $4,000 of that money and we continue to buy those bonds.. Next year they will start reaching full face value. SO the $50 bond we bought for $25 will be worth $50. A 50% return on our investment and it money we never miss.

 

[tvguy]

From your description, your 23 yr old is not yet fully self supporting, not really a fair comparison. There are 23 yr olds who have families trying to make ends meet, let alone save for retirement. Unfortunately, you can have 2 jobs and barely be able to make it. It used to be, if you had a job, you could at least make ends meet. Not everyone can be a doctor or lawyer, that doesn't mean they shouldn't be paid a livable wage a hard days work.

Well, I would hope before a 23 year old started a family they would think about the financial end of it. I know in my case, and it has been 34 years since I was 23, I WAS thinking about retirement savings at the age, and I was NOT thinking about starting a family.

 

[Meetmeinmontauk]

Well, I would hope before a 23 year old started a family they would think about the financial end of it. I know in my case, and it has been 34 years since I was 23, I WAS thinking about retirement savings at the age, and I was NOT thinking about starting a family.

Exactly. A lot of people I graduated high school with have 2-4 kids and are on food stamps and WIC. We probably won't be having kids until I am at least 30 and I'm ok with that.

We will continue to save at least SOMETHING even when we do have kids. The fact that we didn't rush to get married and have babies at 20 years old probably helps.

 

[FINFAN]

One of the most stressful times for people is if they hit that point where their parents are elderly and their own children are teens or young adults - and they are squeezed financially from both ends providing help.[/QUOTE]


we have been living this exact scenario for the last 11 years. Ironically what I feel most of the time is guilt that I don't have more $ to provide better for all involved..or more time

 

[tvguy]

One of the most stressful times for people is if they hit that point where their parents are elderly and their own children are teens or young adults - and they are squeezed financially from both ends providing help.

It can be stressful if you, and your parents don't do proper financial planning. We saved for our kids education, so that was handled. And my mom saved and lived with in her means her entire life. When she need my help, it was paying her bills with her money. She did everything she possibly could while well to make things easy for me. Even bought long term care insurnace, which came in handly.