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Old 08-05-2015, 08:37 AM   #21
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We try to stay under the ACA cliff so we might as well shoot for the FAFSA and state grant limits, too. The FAFSA formulas exempt many asset classes (including personal residence, businesses under 100 employees and retirement accounts). It doesn't make any logical sense sense but rules are rules so I am not going to argue.

Here is another little tip - you can put the tuition each semester on a credit card with 50K or more sign up bonus miles and then pay off the card when the grant money is disbursed for a little bonus money. Free money made off free money - what is not to like about that?
While this may work in certain cases it does not in all. Just because you get a low EFC (expected family contribution) from a FAFSA-only school does not mean you will get financial aid to meet the difference between the cost of attendance and the EFC. In many cases the college simply suggests a bunch of loans to make up the difference (many, many state universities are really struggling financially as state support levels have plummeted over the years). Lots of aid is merit based - so make sure your kids do well in school!
Some elite privates guarantee to meet need, but the vast majority (all?) require additional financial information. Some include your house value and investments in calculating your ability to pay.
Finally, the credit card idea sounds good, but many schools have a credit-card use surcharge. At my kids schools (one huge state school, one elite private) they charged an extra 3% for credit card use. I would have loved 1 or 2 % cashback, but someone has to give the credit card company their even larger cut to pay it - most schools don't want to be that source.
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Old 08-05-2015, 08:52 AM   #22
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Credit Card Tuition Payment Survey 2014
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Students and parents looking to pay a large college tuition bill with a credit card to earn rewards should expect to add a 2.62 percent convenience fee for the privilege of doing so, according to a CreditCards.com survey.
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Fees are common. They're charged for credit card payments by 83 of the 92 card-accepting public institutions, 47 of the 68 private institutions and 12 of the 100 community colleges surveyed.
While most colleges accept credit cards, few embrace them: Just 23 four-year institutions accept credit card tuition payments from undergraduate students with no additional fee or restrictions.
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Old 08-05-2015, 10:41 AM   #23
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Originally Posted by daylatedollarshort View Post
We try to stay under the ACA cliff so we might as well shoot for the FAFSA and state grant limits, too. The FAFSA formulas exempt many asset classes (including personal residence, businesses under 100 employees and retirement accounts). It doesn't make any logical sense sense but rules are rules so I am not going to argue.
Right - doesn't make sense to me either but I'm not turning down free money if the policy makers deem we're in need.

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Here is another little tip - you can put the tuition each semester on a credit card with 50K or more sign up bonus miles and then pay off the card when the grant money is disbursed for a little bonus money. Free money made off free money - what is not to like about that?
I'm already doing the Bluebird / gift card hustle to meet minimum spending requirements. Around a 1% effective fee so $30 or so to spend $3,000. Are colleges letting you charge tuition for free these days or is it still a ~2% "convenience" fee?
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Old 08-05-2015, 10:52 AM   #24
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Are colleges letting you charge tuition for free these days or is it still a ~2% "convenience" fee?
We have a convenience fee, so it only works with sign up bonus miles of 50K or so, not the cash back alone. The extra money is the difference between the $500 or so in rewards points / miles and the convenience fees. We did this with our property tax last year, too.
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Old 08-05-2015, 11:00 AM   #25
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While this may work in certain cases it does not in all. Just because you get a low EFC (expected family contribution) from a FAFSA-only school does not mean you will get financial aid to meet the difference between the cost of attendance and the EFC.
Yes, that is why I posted "A big plus for us going semi-ER while we still had kids at home is that with less earned income we were able to arrange our finances to get decent amounts of financial aid for college." We have a couple of small businesses so that was a big plus for us in terms of the FAFSA. The businesses themselves and their retirement plans are FAFSA exempt asset classes.

Our kids didn't pick schools at random and then we got the bill and and paid whatever. They are going to good value for the dollar schools where they could get grant money, working paid internships and tutor jobs, with relatively minimal out of pockets costs to us.
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Old 08-05-2015, 11:02 AM   #26
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I ERed at 49 with an 11 and 15 yo. They were a big part of pulling the trigger along with being crispy burnt at work. I got to spend so much time with them. Got involved in their sports, boy scouts etc. Just going to walmart was fun back in those days - I always had a posse . Now my daughter has graduated from college and has her career job and my son is going into his senior year. Time slips away, if you got the funds....buy the ticket to freedom.
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Old 08-05-2015, 11:05 AM   #27
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I would have loved 1 or 2 % cashback, but someone has to give the credit card company their even larger cut to pay it - most schools don't want to be that source.
My post referenced sign up bonus miles, not 1 or 2% cash back i.e. spend 3K and get 50,000 miles (which can be worth ~$600 in travel rewards). These still net out well after subtracting out credit card fees.
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Old 08-05-2015, 11:17 AM   #28
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I retired last year at age 52, with my boys then 11yo and 13yo. It was nice helping younger son transition to middle school. And this next year I'll help older son transition to high school.

As a mom, I made a choice not to be a SAHM when they were younger - because at that point I still enjoyed my career and still needed the income. The teen years are pretty formative, so I'm glad I can be 'in your face' and have them aware I'm paying attention to the choices their making.

The tip about SS is good too. Like NYexpat - I learned about that on this forum. It made the spreadsheet of when to take SS a no brainer for DH to start at 62 (several months before I retired.)

I enjoy (usually) spending the extra time with the boys. It has allowed us, for the first time ever, to take an entire summer to travel.... the kids spent the day swimming in Nice, France today. (This will not be an every summer thing - our budget won't allow this more than every 5 years or so) But it's been a great experience to expand their world view and experiences. Having the extra time also allows me to be a better robotics (FLL) coach - something that was hard to do while I was working.
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Old 08-05-2015, 11:23 AM   #29
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My post referenced sign up bonus miles, not 1 or 2% cash back i.e. spend 3K and get 50,000 miles (which can be worth ~$600 in travel rewards).

I am unclear why you are posting that something I didn't post would not work out.
I'm not criticizing your statement, I simply want parents to understand that there are usually fees to be paid to the college. It's easy to misunderstand this point. When I sign up for a new credit card offer, I never have problems meeting the spending requirements for the reward (and would never pay a convenience fee to accomplish this). Each case is different, but its important to make this downside clear.

In a similar vein, many people spend time to minimize their EFC for their kids in college and are then disappointed when their aid offers from college are very small. The reason: their needs are "met" by student and parent loan offers (and work study - a much better source of funds, IMHO, but a small portion of the funds needed).

For future college parents it pays to do lots of reading about college financing before the bills come due. That's probably doubly important if you are ERing and are planning on a low EFC (which you can engineer) making college affordable (which may be very difficult to control).

I'm not disputing what you've said, I'm just adding cautionary information from someone who's been through this in the past. ER folks are careful and often exhaustive planners. I hope to give something else for planners to focus on
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Old 08-05-2015, 05:31 PM   #30
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It's been interesting reading all your different stories of ER and YC (young children.) My hat's off to all you that have saved enough money to continue in retirement while saving enough money for higher education.

We had a child at 40 years old--and she was born an aunt with siblings 20, 21 and 22 years older. Child #3 graduated with an accounting degree without any student loans--expenses paid by us. The young daughter didn't choose to go to college.

But my question is what does a child born to older parents expect them to provide when the parents are retired--with fixed assets? Do you owe them a private school primary and secondary education--and a college education after that?

My best friend has a MBA from Harvard and he's been very successful as a venture capitalist. His two children (born when he was 37 and 39) went to the finest private schools and both went to exclusive private universities "up East". That's 12 years @ $35K times 2 through high school graduation. And $55K times 4 years times 2. His daughter just graduated from medical school. All in all, he's spent over $1.4 million on his children's education, after income taxes. While all his friends are living the easy life in retirement, my friend sold his big house, rented a luxury apartment and he's going to have to work until age 70.

I know this is an extreme case, but where do you draw the line in the sand when someone's retired and they have young kids? Raising young kids is just so expensive.

Like my father told me: I can get you into an IBEW apprenticeship. Or, you can go to college ($192.50 tuition per semester in 1968). Or, you can get drafted and go to Vietnam. It was a no-brainer, and I chose to go after the ole Bachelor's Degree. But I wouldn't know what to do with college graduates living at home since they cannot get good jobs. It's just such a hard decision on what to provide your family in the future when you're retired and funds are simply limited--and you may not have enough money to last until age 95 due to sacrificing for the kids.
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Old 08-05-2015, 09:47 PM   #31
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...

But my question is what does a child born to older parents expect them to provide when the parents are retired--with fixed assets? Do you owe them a private school primary and secondary education--and a college education after that?

.... he's spent over $1.4 million on his children's education, .

..... Like my father told me: I can get you into an IBEW apprenticeship. Or, you can go to college ..... Or, you can get drafted and go to Vietnam . .
Enjoying this thread very much.

We figure we owe them what they deserve and desire based on their track record through grade school, and attitude. Our two are years away from college. If they really want it, we will help them proportionately.

With that said, we are hoping to FIRE to spend more time helping them. That quality time we already spend is paying back dividends, and maybe of the merit kind. FIRE should help crank it up.

We also hope to qualify for some aid during the Roth conversion period. We have happily paid in heavily to the system, and hope to get some in return, but won't bank on it. I wish I had readily access to the financial info on this board preparing for my college. Live and learn.

We will work the carrot, the subtle stick, with the extra FIRE time, and hope for the best. No silver platter here.
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Old 08-05-2015, 10:26 PM   #32
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After carefully considering the implications for many months, I pulled the plug as a 55 y.o. single parent earlier this year. Kids are 14 (F) and 11 (M). My wife of 30 years (and their mother) died in early 2014, nearly a year after her cancer diagnosis.... .
Can't imagine how hard this is on you and your kids. Sounds like you are focused on making the most of it with your kids and your time. Best.
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Old 08-06-2015, 12:49 AM   #33
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It's been interesting reading all your different stories of ER and YC (young children.)
.......
But my question is what does a child born to older parents expect them to provide when the parents are retired--with fixed assets? Do you owe them a private school primary and secondary education--and a college education after that?
........

I know this is an extreme case, but where do you draw the line in the sand when someone's retired and they have young kids? Raising young kids is just so expensive.

......... It's just such a hard decision on what to provide your family in the future when you're retired and funds are simply limited--and you may not have enough money to last until age 95 due to sacrificing for the kids.
My kids expect what I tell them to expect. Sounds harsh in a society where many people make (what I consider to be unreasonable) sacrifices to give their kids the kind of life they never enjoyed growing up. I think spending so heavily on them now that one couldn't pay for their own care later in life puts an unreasonable burden on them later when they are trying to make their way as adults, and I'll do my best to avoid that.

I've found it helps to have realistic conversations with my kids about what things really cost, where value lies, and the effort it takes to pay for it. We've talked about the cost of college, and my oldest knows I'm not going to pay, nor will I facilitate in any way, her spending $200K on an art history degree as an MD friend of mine did for his one of his kids.

The bottom line for me is there are limits, and I intend to be able to take care of my family in a comfortable manner now, and myself until the end. If there is any thing meaningful left when I'm gone, I think they'll appreciate it more then than they would overflowing closets of clothes and the latest electronic devices now. I think they get that today, and if not, I hope they will eventually appreciate that discipline.
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Old 08-06-2015, 01:08 AM   #34
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I was 39 and 41 when I had my kids... So I was already well on my way to retirement savings. Both my husband and I owned our homes when we met- his was debt free. We started 529s good the boys when they were born.

We don't owe then anything but we will offer then the same deal I was offered: tuition at a CSU or UC state school (which includes to schools like Berkeley and Cal Poly). Plus living expenses at a poverty level (dorm or shared apartment)

No private primary or secondary schools, no extra money if they choose to go to a private school.

My kids know about cost savings.... The first question out of my mouth when they ask for something is "how much". They are also very familiar with the word " no".
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Old 08-06-2015, 10:39 AM   #35
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Bamaman has brought up some interesting points. My twins were born just a few months before I turned 40. I wish I were younger when they were born, but you can't un-ring that bell now. A friend of mine has a policy with his kids that I think I am going to use on my kids, and that is: One car, One degree, One wedding. I have saved enough for my kids to attend a private university. If they want a graduate degree that is paid for, they will have to go to a public state school (already paid for when they were 4 years old by Florida prepaid tuition) and use the 529 plan for graduate school.
At this moment, for multiple reasons, I am transitioning my kids from private school to public. We live in a county with excellent schools. Despite immense drama, I am trying to impress upon them that the private school they want to go to is not $25,000/yr (each) better than the public school they are going to next week.
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Old 08-06-2015, 01:32 PM   #36
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If they want a graduate degree that is paid for, they will have to go to a public state school (already paid for when they were 4 years old by Florida prepaid tuition) and use the 529 plan for graduate school.
Don't count that chicken before it hatches. My old boss did the prepaid tuition route (in FL) for his two DDs. One DD went to neighboring GA uni, losing about 75% of the pre-paid value. The other was thinking about transferring to CO from FL to go to a better nursing school (it would be a wash financially, since mom and dad are living near the CO school).

Not that 529s are a much better deal, but the flexibility is very useful.
Can't predict what kids want to do.
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Old 08-06-2015, 01:39 PM   #37
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We have a convenience fee, so it only works with sign up bonus miles of 50K or so, not the cash back alone. The extra money is the difference between the $500 or so in rewards points / miles and the convenience fees. We did this with our property tax last year, too.
Gotcha. Now that I figured out the bluebird / gift card deal at walmart, I can launder $5k/month of spending onto credit cards for those 50k bonus point offers. Or $10k/month spending if I got DW a bluebird too. Fees from GC purchases work out to "only" 1% or so, plus maybe 10-20 minutes in a walmart to use their ATM/Bluebird reload machine.
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Old 08-06-2015, 01:40 PM   #38
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You can't tell what kids will want to do, but you don't have to roll over and play dead, either. We told our 3 girls that we would pay for 4 years of a state school or the equivalent anywhere. So if they wanted Columbia instead of Rutgers (we lived in NJ at the time), they would pay the difference. We did allow them to invade their wedding fund for their master's degrees, but when the wedding money was used up, that was that. Give these parameters, they were all strikingly sensible and budget-minded with their choices.
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