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Pricing Kids out of the market

Last week AMP and NATSEM released a research report which put the value of raising two kids at $448,000. Such studies raise mixed emotions - Do we think we were worth our parents investment - Should finance get in the way of doing the normal family thing?

The report gives some interesting comparators of the average mortgage at $161,400 and the median Sydney house price at $388,000, both of which are less than the cost of raising two children.

It's surprising that we have not seen research on the cost of financing retirement. This is inescapable whereas child raising remains optional. Financial Demographics has calculated that the cost of funding retirement for a healthy couple aged 65 based on current projected life expectancy of 25 years for men and 29 years for women is $668,000. At 1.5 times the cost of child rearing, it's a wonder there is currently so much political interest in paid maternity leave and no interest in restoring incentives for retirement saving.

Posted Thursday, 31 October 2002


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