How parents are juggling paying for kids’ education while saving for retirement as costs rise.

Written by:

Kira Vermond

Globe & Mail

September 21, 2023

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When Cindy Marques was in high school, she knew precisely what her parents expected from her in terms of paying for university – she would split the cost with them 50/50.

Now a certified financial planner (CFP) and director of financial planning and education at Open Access Ltd., a group retirement benefits provider in Toronto, Ms. Marques is convinced the hours working at Starbucks Corp. and footing half the school bill were worth it. She thinks it was a good middle ground.

“My parents had it right with the 50/50 approach, giving me some skin in the game,” she says. “I took my education seriously because it was coming from my pocket too and I didn’t have any trauma of big debt later.”

And the parents? Their retirement goals stayed intact.

As university costs rise and the economy falters, Ms. Marques’s parents’ plan to pay for only a portion of their daughter’s education bill seems all the more pertinent today, particularly as more Canadians find themselves juggling funding school with their own retirements. These decisions weigh heavily. In a recent poll from financial planning firm Embark Student Corp., four in five (81 per cent) parents said they believe it’s their duty to help their children pay for their education. Another 52 per cent said they would even go into debt themselves to get the job done.

Yet, some older millennials in their early 40s have it even more difficult, tackling their own student debt along with retirement savings and registered education savings plan (RESP) contributions.

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It’s important for advisors to sit down with clients and discuss precisely what their main financial goals are; focus on them; then see what’s left over, says Steve Bridge, an advice-only CFP at Money Coaches Canada Inc. in Vancouver. He asks clients to list what’s important to them and what they’re willing to do to meet those goals and still ensure their own financial future is secure. “One of the best things you can do for your children is to be financially secure yourself,” he says. “Who wants to have to move in with their kids later in life because they ran out of money?”

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