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Has anyone retired before sending their kids to college?
Old 08-06-2009, 01:53 PM   #1
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Has anyone retired before sending their kids to college?

If so, how did you do it? Any tips or tricks that you would recommend?
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Old 08-06-2009, 01:55 PM   #2
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While I'm a ways off from this, I'm interested, too. We hope to ER right around the time that we send our oldest off to school.
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Old 08-06-2009, 02:19 PM   #3
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Not close to FIRE yet, but I am on track to ER in well under 14 years, and that is when the oldest will start college unless she starts early. So I certainly plan on ER'ing before the kids start college.

No real plans, other than making sure that I have enough in the portfolio to support the kids while they are still living under my roof. To a certain extent, I think our budget will have a fair amount of kid expenses in it up to and including college, and then once they are out of the house, we will probably convert kid expenditures into travel expenditures (or other hobby oriented expenditures). We will be tied down to our area while the kids are in middle and high school, at least during the school year. There is always the option of homeschooling if we ever decide to take a year off and travel the world or move to Mexico/Thailand/?? for a year. Homeschooling resources and technology are great from what little I have read, so we would consider that if the situation arose where it would make sense and provide value for our family.

College savings is a tricky one. I originally intended to just save the funds in my taxable accounts in the ER portfolio, then pay for college out of the ER portfolio. However my state recently got with it and added good low cost Vanguard funds to their 529 plan, so I just started the 529 plan (first purchase effective today in fact). We get a state tax deduction for the first $5000 contributed each year, so I'll do that for a while. Calculations suggest that amount annually will fund 4 years of full tuition at one of the great state schools nearby for our 2 kids. Other expenses will be paid out of pocket by me, or from scholarships, loans, work, work study, etc.

No clue if we will down-size from the current house into a condo or anything. We'll likely FIRE with expenses in our current house, and any downsizing would be for convenience, not thrift reasons.
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Old 08-06-2009, 02:37 PM   #4
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If so, how did you do it? Any tips or tricks that you would recommend?
We sent them to college then changed our name, address, and phone number

No, actually, unless they have a full ride, or you're really wealthy, that's pretty tough.
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Old 08-06-2009, 02:38 PM   #5
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Read Nords (retired) many threads on college searches for his daughter. Entertaining and educational.
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Old 08-06-2009, 02:43 PM   #6
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Ours is a couple years out of college already. We were lucky as we could afford to pay her expenses out of pocket.

But we told her she had 4 years to get in and out on our dime, after that it was her expense. She graduated in 3 1/2 years, and had fun besides!

That was one incentive that really worked!
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Old 08-06-2009, 04:17 PM   #7
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Read Nords (retired) many threads on college searches for his daughter. Entertaining and educational.
And don't forget TromboneAl.

Some have even retired before having kids.
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Old 08-06-2009, 04:30 PM   #8
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Some have even retired before having kids.
Heh, some have retired as kids - CFB for example.
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Old 08-06-2009, 04:51 PM   #9
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I guess I don't know what you are asking?

If it takes $X to send the kids to college before you retire, your NW has been depleted by that amount.

If it takes $X to send the kids to college after you retired, your NW has to be big enough to withstand being depleted by that amount.

Either way, you had to come up with $X. Or is that the "engineering" view? Or, are you asking about strategies, like 529 plans? Or how FAFSA plays into the different income streams?

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Old 08-06-2009, 05:04 PM   #10
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I retired the first time in 1987. Had one kid start school in 1987 and the other 5 years later. We sent them both to state schools, paid the tab from the sale of our house when we moved. However, I also went back to work after the first one graduated (I was only 47 at the time, and this board did not exist) or maybe I would not have.
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Old 08-06-2009, 05:43 PM   #11
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I had downshifted to part-time work when my first child started college. Both are still in school (see my signature line). I told them I had money for in-state tuition, and would provide free room and board and each a used car for their transportation to the state university 6 mi away. If they wanted anything more than that, they would have to work for it or to earn scholarships. As they were the typical underachiever middle-class kids that did not want to study too hard in HS for a college scholarship, they have been home and going to the state university. We bought our home in the central part of this metropolis 20 years ago with that in mind.

Had they been on their own, would they study harder or going to more parties, I do not know. As it is, they aren't wild kids at all. In fact they are quite tame compared to their peers, but are just used to the comfortable life that we provide for and do not want to work too hard without a bit of pushing and coaching. Did I say underachievers?

By the way, I have not given them allowances since 12th grade; they have been working part-time for their pocket money. In all, I figure they will be graduating with no debt, and if they can't get ahead with that kind of head start, they have no one else but themselves to blame.
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Old 08-06-2009, 06:16 PM   #12
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Have you considered winning a big lottery. That has to w*rk.
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Old 08-06-2009, 06:48 PM   #13
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I guess I don't know what you are asking?

If it takes $X to send the kids to college before you retire, your NW has been depleted by that amount.

If it takes $X to send the kids to college after you retired, your NW has to be big enough to withstand being depleted by that amount.

Either way, you had to come up with $X. Or is that the "engineering" view? Or, are you asking about strategies, like 529 plans? Or how FAFSA plays into the different income streams?

-ERD50
It was kind of open ended. I'm just wondering how tough it is for people to retire before sending their kids to college.

I bet parents feeling they need to pay 100% of X prevents a lot of people from retiring early. My parents retired early and paid about 0.05% of X and the students loans, scholarships, and financial aide picked up the rest.
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Old 08-06-2009, 07:34 PM   #14
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Kids? What are kids?
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Old 08-06-2009, 08:25 PM   #15
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We sent our first off in January. I was still working. The second goes in September. The plan as of 2 years ago was to FIRE (which I could probably still do and make it work), but we decided to hang on until either: a) the economy roars back to life, b) megacorp pushes me out, or c) the kids are at least in their last year of college and the related expenses are winding down.

Actually having a bit of a problem with DS's expenses right now. He has somehow gone from being a very frugal fellow to being a big spender in a period of just a few months. When he started school, I gave him a lump sum to be used for whatever he needed (besides school...i.e., play money, clothes, etc), to be used for the first school year so he could focus on study rather than have to work. I also fund his rent at a student apartment, his tuition, books, and I told him I would fund 300-350 per month for food and incidentals. Well, in the past 7 weeks he has spent almost $1600 on the food and incidentals, meaning he has exhausted the "play money" allowance for and his food money for June, July and August. He's got about a hundred bucks left. I had a chat with him 10 days ago about it. I told him I wasn't going to tell him how to spend his money, but that he needed to exercise caution otherwise he would be hungry. Since then he has spent $300. So, I wrote him a message last night, reminding him of our conversation, advising him that a hundred bucks won't go far, and that I hoped he still has a stash of food in his apartment. I also told him that if he ran out, I would not let him go hungry, but would not fund any more than $10 per day for food until the next scheduled deposit later this month, including the hundred he has. I also told him that if he needed me to fund anything before then he would have to call and explain himself. Also, he just got a job a couple weeks ago, so he may be thinking its OK to live high on the hog.

All of this I did in a kind and gentle manner, elaborating that his mom and I were worried about his decisions (he is a really good kid, but likes to cook and thus likes to feed the whole apartment block several times a week).

He has not responded yet, although I know he has been online (I see his activity on facebook, so I know he's around).

All I can think to do, right now, is to exercise gentle, but tough, love. I know I kind of hijacked the original topic a bit, but if anyone has any better advice I'd love to hear it.

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Old 08-06-2009, 08:30 PM   #16
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Kids? What are kids?
I don't know nothin' about birthin' no babies....
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Old 08-06-2009, 09:29 PM   #17
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Kids? What are kids?
Kids are little bundles of joy that 15 years later became the reasons for your sleepless nights. If you survive that phase, you would be so thankful that you would not mind that they next became the reason you had troubles with your FIRE plan.
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Old 08-06-2009, 10:08 PM   #18
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My parents retired early and paid about 0.05% of X and the students loans, scholarships, and financial aide picked up the rest.
My parents were always upfront with me and my siblings about college costs...they encouraged us to get an education, but made it clear that they would not be able to pay for any of the costs. And, knowing that certainly helped to energize me to find scholarships/alternate ways of funding my own education.

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I bet parents feeling they need to pay 100% of X prevents a lot of people from retiring early.
I think it all depends upon one's philosophy regarding 1) whether a parent should fund their children's college educations and, 2) if so, how much should they fund. I read somewhere that the average college graduate these days starts their professional working life with around $30k in debt due to educational loans and such. I certainly do not want my children to have to go into debt to go to college, but I also do not feel like I need to pay for their college experience in its entirety. I want them to work and earn money, even if only in the summers, and I also want them to have some incentive to apply for and receive scholarships. From the start, DW and I have put money back into 529s for each of our kids, with the goal of saving enough to pay for four years of tuition, books and fees at a good state university. We will stop contributing to their 529s whenever they turn 18 and whatever is in their accounts at that time is what they will have...so, if we RE then it should not really affect the equation. That's our philosophy, though, and you may have a different view of parental responsibilities with regard to kids' college costs.
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Old 08-06-2009, 10:22 PM   #19
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RE - I guess I don't know what you are asking?

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It was kind of open ended. I'm just wondering how tough it is for people to retire before sending their kids to college.

I bet parents feeling they need to pay 100% of X prevents a lot of people from retiring early.
Sure, but that was what I was getting at. Yes, someone may delay retirement because they need to keep working to increase the nest egg to pay for the kid's education. But, if they paid for the kid's education while they were working, *that* drew down their nest egg and delayed their retirement.

It all seems the same to me. To cover $X, you have to delay retirement, whether that $X is spent before retirement or included in the post-retirement budget. Am I missing something?

-ERD50
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Old 08-06-2009, 10:36 PM   #20
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It all seems the same to me. To cover $X, you have to delay retirement, whether that $X is spent before retirement or included in the post-retirement budget. Am I missing something?
-ERD50
In practice, it may not be the same in light of recent severe market downturn. Most of us couldn't imagine it got this bad. Else, we would have gone all to cash, then gloat about it, yes?

Unless an ER has lots of margin in his portfolio, it is easy to feel, shall we say, a bit underfunded compared to 2 years ago. I do.

So, if one is still working, one has the option of delaying his retirement a bit, while if one is already out the door, he might be pondering whether to tell Junior to be his own. I guess that is what bothers the OP.
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