Family-Friendly Ways to Save for Retirement

As a parent, you have a lot of financial responsibility on your plate. After all, according to the newest figures from the U.S. Department of Agriculture, the cost of raising one child from birth to 18 is about $241,080 for a middle-income couple. And that doesn’t include college. So, how can you be expected to save for your own retirement as well? Well, the experts have a few key things to keep in mind when taking on the task of planning for your future while raising a family. Here's how…

Although the numbers are sobering, the new study by the National Institute on Retirement Security (which found that the average American working family is way behind on saving for retirement) at least proves that you are not alone in your struggle to save. Making the decision to finally put your retirement first is a big step in the right direction, so start by patting yourself on the back—then get ready to get down to work!

While it’s tempting to start socking away for your child’s college education the second the strip turns pink, that’s not always the best idea. “Saving for retirement and an emergency fund need to be your highest priorities,” says Christine Fahlund, senior financial planner with T. Rowe Price. After all, when push comes to shove you can always take out loans to put your child through college … the same can’t be said of your retirement.

Even a small amount, like $20 or $30 a month, is a good way to ease into investing without feeling like it’s putting too much pressure on your family expenses. “Once you’ve become comfortable with that amount, increase it,” says Lori Mackey, founder and CEO of Prosperity4Kids, Inc. “It will become a habit that is essential to your well-being.”

If you never really thought of retirement before you had a family, don’t feel discouraged—it’s never too late to start saving. “Each decade [of saving] makes a difference,” says Fahlund. While it’s true that the earlier you start saving the better, don’t let that be an excuse to not start funding your future as soon as you can. “Put time on your side for your retirement savings to compound as soon as you can,” Fahlund recommends.

Speak to your financial adviser to get a feel for how much you think you’ll actually need to retire comfortably. Having a goal will help you feel like you’re accomplishing something realistic every time you put money into your retirement, instead of just blindly saving. If you don’t have an adviser, many online calculators (like this one from Mass Mutual) can help you figure it out. According to Fahlund, T. Rowe Price recommends saving at least 15 percent of your salary each year, including any employer match. “If you can’t get to 15 percent yet, consider increasing your contribution amount by 1 or 2 percentage points,” she says. “You’ll get there!"

If you’re a stay-at-home parent or if you’re working part-time (or if your company simply doesn’t offer a 401k plan), that’s not an excuse to not save for retirement. Consider saving in a Roth 401k (check out the difference between a 401k and a Roth 401k here) or an IRA, instead. As an added bonus, these types of accounts can offer significant tax breaks later, says Fahlund.

Whenever you save money by getting a discount, coupon or something on sale, take that difference and invest it, suggests Mackey. This is an easy way to amp up your retirement savings, and you’ll feel twice as proud when you score that great deal.

Saving for retirement is definitely a conversation you should have with your kids, and involving them in the process is a good way to get them interested, says Mackey. “Many kids that start investing young will continue this habit into adulthood, and you won’t have to support them down the road,” she said. Besides including them in your own investing decisions, you could play The Stock Market Game, or Financial Football by Practical Money Skills. “Kids love competition, and you can help them learn something at the same time with these.”