Age 47, software engineer, ready to early semi-retire, but one big variable...

[headingout]

Hi everybody! I appreciate all the friendly and informed posts here and hope to contribute as well.

I'm 47, a software engineer, married, with one son -- a junior in high school. We own our house outright, no debt, have a total investment portfolio in the high 6 digits, which I've managed myself for 10+ years.

I've worked more than 20 years at a generally decent, medium-sized corporation. But the technical work itself has been incredibly stressful for me (picture working calculus problems all day long when you don't like calculus), and I'd have left long ago if not for putting my son through private school.

My wife and I are very frugal and track our expenses carefully. We could probably semi-retire later this year, given some part-time work consulting and teaching, except for one big variable: college.

Here's where I'd be interested in some personal advice, especially from the experienced parents out there: When you've worked long and hard and produced a happy, healthy, smart 18-year old, how much more do you owe them at college time? Obviously we're going to support him and make sure he gets a decent education at one of our better state schools, as a minimum. But when he starts talking about out-of-state or private colleges, I get queasy at the costs. That could mean several more years of work! Any words of wisdom on this?

 

[hova22]

Coming from the view of a previous college student...

My parents told me they would pay for 4 years at a state school. However, if I wanted to go elsewhere (or longer than 4 years), I'd be on my own to fund anything over and above that. I feel very fortunate that they were able to pay that much for me. Sure it would have been nice to make those choices independent of financial contraints, but it was a good dose of reality as an 18 year old. Unless you're Paris Hilton, the real world requires this financial decision making. Besides, I ended up loving the state school I went to. Sure, the other colleges just had a better 'marketing' program which sucked me in as an 18 year old. However looking back, I wouldn't have done it any other way.

 

[jIMOh]

It's OK to make son pay for college. I have two twins which will be born in June. I do not plan on paying for their schooling past age 18.

You mention scaling back to part time. Could you set some money aside while part time and give your son a lump sum when he graduates (maybe 20k or 30k). Then he can use it to pay down some of his loans while he gets on his feet in 4 years.

My experience suggests that the college one receives a bachelors degree in is not that important. Experience, professional certifications and masters degrees matter more than the under grad school of record.

 

[travelover]

........... But when he starts talking about out-of-state or private colleges, I get queasy at the costs. That could mean several more years of work! Any words of wisdom on this?

At 18 years old, I doubt that your son really understands what he is asking of you. Many, including myself, have bootstrapped their way through college on their own dime and come out stronger and more independent as a result. I'd say, do what is best for you. In time your son will understand.

 

[SecondCor521]

It's a very personal and subjective decision.

My parents' deal to their three kids was that we could go anywhere we could get into and they would pay for it. They also helped pay for my sister's MD and my MBA. They'd help pay for a PhD or law degree if I wanted to go. I certainly appreciate all of their support but I also wonder if i would be more driven/self-motivated if I had to work harder for my college degree. Studying is the easy part if the tuition, room, and board are taken care of.

I've talked with a number of other parents on this subject and the answers range all over the map in terms of how much, which years, or which schools. I have three kids of my own and I honestly haven't nailed down exactly what my deal is with them. My general theory is that I'll pay for 4 years of an average state university for each of them; anything beyond that is up for discussion. I have three kids so money will be transferred between them as needed; if there is money left over I will split it amongst them according to how expensive of a college they went to and how much in scholarships they earn. If there is not money left over I will pay on their student loans until they are gone.

I do think it is important to start talking with them in general terms about college and what you have decided you can afford. That way the kids have time to adjust and make their own plans.

2Cor521

 

[Marquette]

I'm sure this wouldn't help in your situation, but my parents were too poor to help with tuition (although they very graciously sacrificed to split the cost of books). I was able to attend a state school on federal grants and state and university scholarships. I was very motivated to study as my ability to attend became directly tied to my GPA. That assistance plus a work-study job allowed me to survive quite well.

As others have pointed out, I would think a great compromise might be to put aside whatever amount a state university would cost and then your child can count on that level of "bank of dad" grant money when choosing where to go to school.

 

[KM]

I did a lot of research when my kids started college and became convinced that in 80% of the cases, you can get as good an education at a public university as at any private university. A lot of people confuse price with quality. Expensive = good. This is not always true. A lot of people confuse private = small. Also not always true.

We decided what type of school we thought our kids would do best in and then looked at those type of schools in the public sector, wherever possible. Along with your in-state school, you might find some decent out-of-state public colleges that fit your budget.

Of course, I also know plenty of people that have told their kids - I will pay $XXX, as that is what it would cost to go in-state. You want to go anywhere else and you pay the difference. That is more than fair. No, I don't think parents owe their kids a college education. But I do think one of the best gifts a parent can give a kid they like is a college education with no loans when they graduate. But this also assumes the child understands the value of a dollar and appreciates what they are getting. It also doesn't hurt to let them work to pay for their books, spending money, board, etc. Make them pay for enough so they have to work, don't have enough money to go out partying all the time and complain at least once a month about being broke - but not so much that they graduate with huge loans.

Good Luck. We have 2 payments left on child #2.

 

[TromboneAl]

I think the "We'll pay an amount equal to state tuition." idea is a reasonable compromise. That's would I would do if doing it over.

We paid a lot for the first two years of a private college, but then got good scholarships, so that the last years were about the same as for a state school.

If she wants to go to grad school, that will be on her own dime.

Two more checks to go!

 

[firedude]

I have put one through college, have another finishing her sophomore year and a third still in high school. I promised all of them that we would pay for a state school 4 year tuition, room and board and books. They all know exactly what is available to them and can make decisions as to where to go to school and for how long. I also stipulate that they have to get "B" or higher grades. So far it's worked well for us.

 

[prgsdw]

Well, from the perspective of the son... I know for myself, it was a pretty bitter pill to swallow to make my own way. Particularly when I had to move out and get my own place as well right after graduation. However, I took a year off between high school and college, saved some money, grew up a lot and paid for it myself as I went. Took a little longer than I wanted, but for the last 11 years I've had an opportunity once a month to smile inside - while my wife writes a check for her student loans...which are nearly paid, but it's been a long time coming for her.

I can understand my dad's opinion now - that if I really wanted a college degree, I'd make it happen myself and when I did, I'd be glad for the sense of accomplishment. He was right. It was really hard, but I wouldn't take it back now.

 

[73ss454]

Welcome Headingout,

DW and I told our kids that we would pay for all schooling as long as they wanted to go. DS decided not to go to College so we gave him the same amount that we spent for DD's education to help him with a house. We paid for DD's College and Grad school.

I'm not sure if there's a right or wrong decision for this problem it's just what's the right thing for you.

 

[danm]

I'm in a similar situation - SW engineer at a midsize company, job is presently low stress (hasn't been so previously), my only child is in Kindergarden presently, etc.

My philosophy is that I'll do a dollar for dollar match, within reason, for his college. I didn't get a free ride through school, but I did get help. I don't know where this idea that the parents bankroll the entire college experience comes from - maybe from the mutual fund industry which wants to see college money invested.

I don't think it's good for kids to get a free ride - they need some skin in the game. That's why it's an introduction to 'real life'.

 

[rkser]

Pay it now or pay it later. I would pay it now

The 529 plan is paying for DD's Med School after paying for her undergraduate school. I am saving in 529 plans for DS who is a freshman in High School.
My parents paid for the education needs for their 3 children including my Medical School. I realize how hard one has to compete in today's competitive world both in School & later on for jobs in real life. I am fortunate enough to pay for their education after saving within reason for our retirement. Can I save for a more cushy retirement for us at the cost of paying for kids education, Yes I can.
We do not buy them new cars or pay for fancy travels etc..etc, like some of our freinds. In my view education is the best investment there is. Maybe kids can pay for their education by working or taking loans & still do well at the task at hand, but I choose not to leave that to chance. It is a personal decision, I guess there is no right or wrong answer. We see it as giving their inheritance now rather than later. My 2 Cents

 

[jIMOh]

Promise to pay the last two years tuition. This forces son to get thru first two years with some effort (grades) and maybe the son will do a 2+2 program at a community college then transfer to a larger 4 year school or something like that.

 

[Ronstar]

My parents paid for the first 2 yrs for me at a junior college. Then I was on my own. I think worked well, because it gave me some responsibility and forced me into some financial planning early on.

 

[freebird5825]

that's an easy one for me... my mom was a waitress (divorced and on her own money-wise) and simply didn't have the money for college. so she told us kids..if you want to go to college, it will have to be on scholarship..so turn off the TV and study hard! she was a tough one. LOL

i got the NY state scholarship for tuition only, at any NY state school. Yippee! I worked summers and did work study while in college for all other costs.

my mom banked the money for me so i wouldn't spend it, and at the end only had a small student loan. i majored in physics BTW, so i'm a techie too.

if your son wants it bad enough, he'll crack the books and get some partial or total financial aid based on his grades.

there are many community organizations out there who offer scholarships, some small some large. are you members of them? it might not be a bad idea to join and see if he can apply for assistance thru these groups.

good luck!

 

[freebird5825]

I'm in a similar situation - SW engineer at a midsize company, job is presently low stress (hasn't been so previously), my only child is in Kindergarden presently, etc.

My philosophy is that I'll do a dollar for dollar match, within reason, for his college. I didn't get a free ride through school, but I did get help. I don't know where this idea that the parents bankroll the entire college experience comes from - maybe from the mutual fund industry which wants to see college money invested.

I don't think it's good for kids to get a free ride - they need some skin in the game. That's why it's an introduction to 'real life'.

i hear you loud and clear. parents should never bankrupt their own retirement for college costs. i see a lot of former colleagues doing this (2nd mortgages, etc) only to have their kids waste time and not work hard in college.

if the child is earning the money to go, it will mean more to them. and be the best life lesson they can ever get.

 

[headingout]

Thanks for the excellent thread everybody. It's really helpful to hear these different perspectives and ideas: I appreciate it!

To summarize, this is a personal decision that's always going to depend somewhat on the child, the course of study, and family finances.

But I see some consensus on the cost of an in-state public education as a kind of baseline to offer kids, assuming you can afford that. Having paid part of my own college, as well as owning my own business at times, I'm also in strong agreement that they need some of their own "skin in the game." In our case, I think this will take the form of his paying all personal expenses, and perhaps room & board in the later years.

 

[freebird5825]

At 18 years old, I doubt that your son really understands what he is asking of you. Many, including myself, have bootstrapped their way through college on their own dime and come out stronger and more independent as a result. I'd say, do what is best for you. In time your son will understand.

hear hear. self made is the best way. yes, it was tough, but what is that old saying?

when the going gets tough...the tough get going...

 

[bubba]

This is so personal to every family, but for us, we chose to put our son through a state college. In fact, we believed we owed him that (our opinions, only). Luckily, he did very well on the ACT so all his tuition is via scholarship. We paid the all the room and board for a while, but then he started the co-op part of the program (mechanical engineer) and has made enough money to pay for quite a few of his own expenses. We keep him in a car, pay for his cell phone, etc. He will lose his scholarship if his grades drop, so he works very hard on his studies. The money that we'd saved for his tuition will be turned over to him at graduation to help with his first house. We aren't wealthy - average means. But, we wanted to do this for our child. There is a burden on him to earn this benefit every day; he's been warned that the plug will be pulled and he will be on his own in a snap if he screws this up. As long as he keeps his nose clean and to the grindstone, we will be his biggest supporters.

 

[militaryman]

When we started out "child rearing" and marraige life we set our "needs" budget to operate off ONLY my income.

Pretty tough in that I started at WG08 in federal Gov. but we stuck to it with the idea that DW would work for "extras" only and often she would not be working at all.

Now that the oldest is graduating HS my DW looked at the local colleges and found a good one that offers 100% tuition remission for employees and dependents. She took a position lower than what she was working at (less pay) but now, college is the kids option.... Get good enough grades to get into the college Mom works at or foot the bill yourself. We agree to pay books and fees (which actually totals up to about what a community college charges for tuition so if they wanted to go to comm. college we would pay that I guess) -- But if you wanna live on campus that is on you. The oldest is enrolled and starts in the fall and even though we are only about 12 miles from college she wants to live on campus and has elected to work parttime to pay for that. (she is welcome to come home and stay for free anytime) She has half year saved already so this has been a great life lesson for her and we are PROUD.

The younger freshman HS student is far less goal oriented and I have no idea if she will make it to the college stage.

So basically I say -- check all your options -- We would never have qualified for "need based" scholarships so we found another way to get out of tuition. I think that in the long run the job my DW took will be better for her if she wants to move up as she is now working for a well known private university vs her formal job that was with a community college.

We are also not thiking about having to out off early retirement for college though because I just turned 40 and so DW and I will be about 48 when youngest finishes a BA degree IF she decides to get her act together.

 

[Dawg52]

My parents paid for the first 2 yrs for me at a junior college. Then I was on my own. I think worked well, because it gave me some responsibility and forced me into some financial planning early on.

I also attended a jr college. My summer jobs paid for some and my parents paid some. Pretty much the same for my final 2 years at a state University. They paid one year and I got a loan for my final year. I didn't think anything about it. They didn't get a chance to go to college and I was happy for what they were able to do for me.

I see nothing wrong in offering a similar plan for your son.

 

[Alan]

Here's where I'd be interested in some personal advice, especially from the experienced parents out there: When you've worked long and hard and produced a happy, healthy, smart 18-year old, how much more do you owe them at college time? Obviously we're going to support him and make sure he gets a decent education at one of our better state schools, as a minimum. But when he starts talking about out-of-state or private colleges, I get queasy at the costs. That could mean several more years of work! Any words of wisdom on this?

We put both our children through college and consider it an excellent investment. However we did say that we would pay for in-state public schools. DD wanted to go a school in an ajoining state but they offered her a place with in-state fees and we were happy to pay that even though an in-state school in our state would have been a little cheaper. No regrets, she graduated with a 4.0 GPA in computer science and got an excellent job as a sofware engineer with IBM.

DS had the same options, had an offer from another ajoining state which also offered in-state fees but he opted to stay in-state anyway. Again, very pleased to have been able to put him through college (he graduated exactly 1 year ago and is gainfully employed at a bank).

 

[Calgary_Girl]

My mom and dad paid for 4 years of University for me and my sister. The ground rules were anything beyond that, we were on our own.

DH wasn't so lucky - he footed his undergrad and his MBA degrees himself since he was being raised by a single mom and his dad was basically a deadbeat.

We opened up an RESP (similar to a 529) when our daughter was a month old to help with University tuition. She's only 22 months old but we already have $6600 saved The last thing I want is for her to be tied down with student loans...

 

[haha]

Hi everybody! I appreciate all the friendly and informed posts here and hope to contribute as well.

I'm 47, a software engineer, married, with one son -- a junior in high school. We own our house outright, no debt, have a total investment portfolio in the high 6 digits, which I've managed myself for 10+ years.

I've worked more than 20 years at a generally decent, medium-sized corporation. But the technical work itself has been incredibly stressful for me (picture working calculus problems all day long when you don't like calculus), and I'd have left long ago if not for putting my son through private school.

My wife and I are very frugal and track our expenses carefully. We could probably semi-retire later this year, given some part-time work consulting and teaching, except for one big variable: college.

Here's where I'd be interested in some personal advice, especially from the experienced parents out there: When you've worked long and hard and produced a happy, healthy, smart 18-year old, how much more do you owe them at college time? Obviously we're going to support him and make sure he gets a decent education at one of our better state schools, as a minimum. But when he starts talking about out-of-state or private colleges, I get queasy at the costs. That could mean several more years of work! Any words of wisdom on this?

Have him apply to the Ivies. They recently revamped scholarship programs such that middle income parents often pay nothing.

Whatever he can't get in grants, let him take in loans. Then he can discover if he has enough confidence in himself and in his work ethic and in the efficacy of an Ivy degree to underwrite whatever work will be required to pay off his debt.

Most kids will be happy to sign Dad on for anything. Not that they are bad, just kids.

Here's a story to give you pause. Last weekend I attended an event with a lot of recent Ivy graduates. I talked at length to a young woman who has been out for 4 years or so. She has an honors degree in math and computer science. She is personable and articulate, and has good personal hygeine. Still she has not been able to find a professional level job. She works with no benefits and generally poor pay as a math tutor for a local chain.

She is considering returning to school to start over as a pre-med.

Ha