Solo Parenting

A financial lesson plan for single moms and dads on funding education and retirement

than whites–roughly $12,200–for their children’s education. But they are forsaking their retirement savings, with the average savings of $44,000 compared to $69,000 for whites.

“No one knows what the future holds. More and more we are seeing children coming back home to live with their parents,” says Jonathan Sard, a certified financial planner with Financial Alternatives in Atlanta. “You think that your kids will be gone by the age of 22, but your son or daughter might get laid off from his or her job,” he says. “You never know when the support of your child is going to end.”

The Ariel/Schwab survey revealed that 32% of Black parents expected to support adult children compared to 20% for whites. Asks Sard: “If you have saved all this money all a long for your kids’ education and nothing for your own retirement, what happens to you when you’re ready to stop working?” Figure out how much you need annually to live in retirement–projected living expenses and income (Social Security, pension, and value of savings). How much do you need to save annually to reach that retirement goal?

As a single parent, how you allocate assets for retirement and your kid’s education may differ, says Pierre Dunagan, president of the Dunagan Group, a Chicago financial services firm. “If you are age 40, your mix may be 60%-80% in stocks mutual funds and 20%-40% in fixed-income funds,” he says. “For your kids, the younger they are, the more aggressive you can be–80%-90% in stock mutual funds and 10%-20% in fixed-income securities.

Moreover, you need to stash some cash in a contingency account (three to six months’ living expenses). Both Wills and Roberts understand how crucial it is to faithfully deposit money into an emergency till. Wills unfortunately has depleted her funds, mainly owing to about $25,000 in debts from
a dissolved medical partnership and $10,000 in home repairs after an earthquake.

Bilal Hailstock debunks the stereotype that single Brothers shrug their responsibility of fatherhood. For 11 years, he and his ex-girlfriend have had joint custody of their daughter, Atiya. “We never had to go through the system; it was always understood. Her mother sends money when [Atiya is] with me and when she’s with her mother, I send money there,” explains Hailstock.

Hailstock, 36, is pleased with his company’s compensation package: He has disability and life insurance policies–which each pay three times his salary; a 401(k) plan in which his employer matches dollar-for-dollar; and, a pension. For the past 10 years, the senior claims adjuster for New Jersey Manufacturers Insurance Group has contributed 10% of his salary to his 401(k), valued at more than $100,000, and mostly invested in the Vanguard S&P 500 Stock Index Fund. Hailstock also has about $7,000 invested in three emerging-growth tech companies.

His biggest concern is identifying the best way to fund a college education for Atiya–who plans to attend her parents’ alma mater, Hampton University in Virginia. Until two years ago, Hailstock’s daughter lived with him; now he gets

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