Familes forced to choose between retirement savings and education.

According to a study released by Statistics Canada on 19 May 2011 lower income families (<$32k/yr) cannot save for both retirement and post-secondary education for there children. This can be attributed to sharply rising tuition fees which are closely related to education savings.

Only 21% of families in the lowest fifth income bracket were able to affording saving for both retirement and post-secondary education. With 70% for new jobs requiring at minimum some post-secondary education it is not surprising that families tend to save first for their children’s education and then their retirement.

As per Statistics Canada,

“Even in households with the lowest incomes, proportionally speaking, more parents were putting aside money strictly for their child's postsecondary education than were preparing financially for their retirement only.”

If this trend continues, we should expect to see even more pressure placed on our already strained public pension programs, both with the demographic time-bomb of the baby boomers and the recession. This undermining of retirement savings with high tuition fees is the manifestation of the downloading of the cost of public programs (post-secondary education).

The only solution is for our newly elected (and re-elected) federal representatives to develop a national vision of post-secondary education, similar to the national Health Act, to guarantee equitable funding and accessibly across the country.

If nothing is done to mitigate this trend we will continue to set the preconditions for a perfect storm to see the end of retirement security in Canada. Regardless of political stripe continuing to downloading costs to pensions and private retirement savings can hardly be seen as responsible economic stewardship.