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Old 02-06-2016, 06:41 AM   #21
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The big question is college. Are you planning on fully funding private college for all 3 kids or is that coming from a separate pool. That could be a $750k total in expenses or more if you are intending to fund grad school. If you're not planning on paying for their college, having them borrow or going public that will certainly reduce it, but that certainly needs to be factored into the decision. I had college fully covered in 529s before I pulled the trigger.

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I'm still w*rking full time but have two teens with college on the horizon. I model/manage the financial impact of this by just pulling it all out of the retirement & net worth calculations -- both the saved assets designated for college and the college expense obligation. I treat future college costs as my first obligated dollars and nothing is available for the retirement/net worth pile if that's not funded.

I find it simplifies both my modeling and my sleep to clearly drive a wedge between college planning and retirement planning.

My $0.02.
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Old 02-06-2016, 07:16 AM   #22
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Originally Posted by krotoole View Post
I'm still w*rking full time but have two teens with college on the horizon. I model/manage the financial impact of this by just pulling it all out of the retirement & net worth calculations -- both the saved assets designated for college and the college expense obligation. I treat future college costs as my first obligated dollars and nothing is available for the retirement/net worth pile if that's not funded.



I find it simplifies both my modeling and my sleep to clearly drive a wedge between college planning and retirement planning.



My $0.02.

That is how we do it also.


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Old 02-06-2016, 08:50 AM   #23
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Originally Posted by rrppve View Post
The big question is college. Are you planning on fully funding private college for all 3 kids or is that coming from a separate pool. That could be a $750k total in expenses or more if you are intending to fund grad school.
Or it could be under $250,000 for all 3 through grad school. And that's paying full list price without any financial aid.

Maybe we should have a poll on what parents actually pay for their kid's college nowadays and not the hyper-inflated numbers provided in the media?

We have paid for 1.5 college educations (including grad school) and 0.5+ to go.
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Old 02-06-2016, 08:56 AM   #24
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The "3 teeners in the house" is a big deal to me. I'd expect expenses to shoot up when they are in college, then drop a lot.

I'd want to estimate what it takes to maintain our current lifestyle for just the two of us. That's the long term need. Then, add a lump sum for spending on the kids between now and the time they are (hopefully) self supporting.

Making up numbers, it might be that $1 million covers everything I need/want to spend on the kids over the next 8 years, and after they're gone the DW and I can maintain our lifestyle for $100,000/yr plus taxes. We'd have $3-$4 million to cover that.
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Old 02-06-2016, 09:08 AM   #25
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I'd want to estimate what it takes to maintain our current lifestyle for just the two of us. That's the long term need. Then, add a lump sum for spending on the kids between now and the time they are (hopefully) self supporting.
That's a very good and important point for the OP to consider when modeling their plan.

There's a big difference between saying "I'm going to draw 4-5% inflation adjusted forever." And saying "I'm going to draw 4-5% for the next X years and then only 3% thereafter."

They can set cash aside for the temporary expenses and use the remainder as their retirement fund.
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Old 02-06-2016, 09:16 AM   #26
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Originally Posted by krotoole View Post
I'm still w*rking full time but have two teens with college on the horizon. I model/manage the financial impact of this by just pulling it all out of the retirement & net worth calculations -- both the saved assets designated for college and the college expense obligation. I treat future college costs as my first obligated dollars and nothing is available for the retirement/net worth pile if that's not funded.

I find it simplifies both my modeling and my sleep to clearly drive a wedge between college planning and retirement planning.

My $0.02.
I don't include 529 money when I use firecalc - but I do when I use Quicken Lifetime planner. My goal is to fund in-state public schools and I've budgeted $100k per kid *above* the nominal spending (which already includes their health insurance, food, etc.). To be conservative, I don't have a spending drop when they are launched and independent... but I suspect that budget excess will be consumed by travel.
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