How Having Kids Impacts Your Retirement Goals

You already know that having kids costs a lot of money, but if you don’t plan accordingly, having them could ruin your retirement goals. According to a report from the Center for Retirement Research at Boston College, each child in households in their 30s reduces their income by 4 percent and each child leads to around 3-4 percent less wealth. The research shows that by the time households are in their 50s, each child increases the households’ national retirement risk index by 2 percentage points.

But, having children has a smaller impact on a household’s retirement risk than other factors, for example having an employer retirement plan, particularly a defined benefit pension plan reduces the likelihood of being at risk by around 40 percentage points.

The study says having children does not mean parents will be less prepared for retirement than those without kids. Researchers suggest households cover the costs of raising a kid by spending less on themselves to maintain retirement goals.