pushing out retirement to help kids with college

[albireo13]

Ugh ... I was hoping to retire next year. FireCalc has us at 99% and I think we are fine. I am 62yo now and ready to go. My MegaCorp job isn't horrible but, it goes in waves. It can be a stress storm for several months and then relax for a few months. The biggest problem is I have health issues due to sedentary office environment plus a long commute (50+min each way). When I was younger this was no big deal. Now, at 62, it really bothers me. Lower back pain, sciatica, and bad life style. Stress at work has also led me to drink too much.


Anyway, the complication is we have 1 son 2 yrs through college and an older son who has decided to go back to college for a BS in Environmental Science. He has no savings to speak of. He is a good kid, hard worker, but has not found a career job yet. We really want to help both boys with college. Our hope is to contribute enough to keep their student debt manageable .... $50K or less. It would probably mean coming up with $30K for each of them.



The downside is that it will mean extending my retirement out an extra year or 2. This really hurts but, I've run the numbers. My mindset right now is "so be it". I want to minimize dipping into retirement to help with college.




Has anyone else gone through this situation?
words of advice?


Thx,
.... down in the dumps

 

[Newventurer]

What was the plan prior to the kids going to college?

Did the kids live up to their end of the agreement?

We put three through with no student loans. Lucky they worked hard and got scholarships for much of their cost. They worked summers and some during school. We had the agreement that we only helped while they competed a 4 year degree anything extra was on their own. We had one that went on to get her Masters and she paid for it along with scholarships.

 

[jazz4cash]

I think if your plan can’t sustain a 60k surprise, maybe it’s not adequate to begin with. Addressing the stress, health, and drinking habit seems more important than helping the kids. They have significant resources in terms of time/youth. I say stick to your plan timing or go no more than 1 yr extra and help as much as you can. Maybe early SS is a way to do both.

 

[pb4uski]

Bad idea. You and your health are more important than your kids not having student loans.

What was your original "deal"/understanding ith the kids?

If FIRECalc is 99%, then there is a good chance that you will end up with more money than some bad case scenario. If you retire and your sequence of returns early on is good you can always gift your kids money to help with their student loans.

 

[badatmath]

Go "back" to school on your oldest? Did he drop out the first time or is this a second degree? I would not be very inclined to help with either. I like the idea of suprise gifts down the line if you want to help them pay loans down.

 

[RAE]

Bad idea. You and your health are more important than your kids not having student loans.

+1, I agree. Your older sons decision to go back to college is not something you should feel obligated to fund. Yes, he will have more college debt, but he is young and should be able to handle it over time. Decisions have consequences, but in this case his decision shouldn't result in negative consequences for you and the retirement you have planned for. I would talk to him about it.......my guess is that he will understand.

 

[albireo13]

We can sustain a $60K hit but, it bumps the needle down in our retirement plan.



Our plan has always been to pay half (2yrs) of their college, assuming state school.


Our 26yo son is going back for his BS. He lives on his own and is self-sufficient but, has had low paying jobs and works 6 days a week. The awesome part is that his financial aid offer is minimal .... $2700 Pell Grant. and $14K in federal loans.
I don't consider loans as "aid" , especially at the interest rates these days.

 

[Aerides]

I would keep whatever plan is in place for the kid already in college (this should not be a surprise to you and should already be in your expenses calculated for the next two years, no?)

The son going back to school? Assuming you already covered his first degree, paying for a 2nd seems unwise. No way my parents would have sprung for that!

But I do agree with the sentiment that $50k as a surprise expense should not derail you, as it means you are already too close. However, you're 62, so SS is near, as is medicare. You are at 99% but I have no idea how much discretion you have in your budgets, or how realistic they are.

 

[albireo13]

He took some years off after high school, attempting to start a career. He didn't drop out.

 

[bingybear]

If 60k breaks your retirement plans... then you aren't prepared to retire in the first place. Drop 60k from your assets and run firecalc again.

 

[PatrickA5]

Having no idea what your real numbers are, my guess is you've saved a significant amount of money if you're at 99%. If spending $60K over the next several years means you have to work a couple of more years, then I think things are too tight on your budget. What happens if you need a new roof and A/C in the same year during your retirement - would you have to go back to work then also?

I'd say retire now. You can pay for their schooling now, or wait a few years and pay off a certain amount of their school loans.

 

[4legsgood]

Can the kids work while going to school? My daughter pays for her food and some of her rent with her nanny job. It helps a lot, and she'll have a track record of work to put on her resume.

I agree with others, 60k shouldn't affect retirement outcome that much.

 

[Jerry1]

I’d stick with your RE plan. If that $60K comes into play, it will happen much further down the road. Said another way, it’s probably the difference between going broke at 90 instead of 92. By then your kids will be successful enough to help you out (yeah right). Either way, those two years of your life, IMHO, are not as valuable as the next two and I wouldn’t want to spend the next two at work.

All being said knowing that your FireCalc numbers will likely still be above 95%.

 

[brett]

Help your son.

Re-evaluate your numbers. If necessary get some help on this.

Something is wrong. Either you do not have the funds for retirement or you calculations are incorrect.

 

[Teacher Terry]

When 2 of my adult kids wanted to return to college I invited them to move back home and live for free and I would feed them of course. Both did that, got some aid and took out loans. I did not let their decisions affect me.

 

[harley]

When 2 of my adult kids wanted to return to college I invited them to move back home and live for free and I would feed them of course. Both did that, got some aid and took out loans. I did not let their decisions affect me.

That's an excellent solution, assuming you can handle having them around.

 

[txtig]

When 2 of my adult kids wanted to return to college I invited them to move back home and live for free and I would feed them of course. Both did that, got some aid and took out loans. I did not let their decisions affect me.

Working two more years? Or, having the kiddos move back home? Not sure which one is worse!!

 

[Teacher Terry]

They were 21 and 29 at the time and it was fine having them back. Long gone now.

 

[youbet]

There are really two distinct aspects of OP's question:

1. Can I still FIRE on schedule if my expenses take a one-time $60k hit early on?

2. Is spending $60k on unplanned educational expense help for my sons appropriate in my circumstances?

Question #1 is one we can sink our teeth (and computers) into without the subjective aspect of whether helping the boys with college is the thing to do or not. I agree with the other posters who suggested that if a $60k one-time hit derails RE, then existing plans might be cutting it a bit close. It doesn't pass the common sense test. What are the details? Pension? SS? Planned WR? Etc.?

Question #2 is very subjective. We all derive pleasure from doing different things. For many (including me) being able to prudently and discretely help family is something that brings me great pleasure. Others, as seen in some of the content above, feel very differently. But it's all subjective since it will be discretionary spending on your part and effectively utilizing it will be primarily up to them. Fun to talk about, but only OP can decide if spending the $60k on his sons is the best way for him to maximize the satisfaction and pleasure gained from spending the money.

So OP...... What's the deal with your RE plans? Are there other discretionary spending items in your budget you could look at cutting? What are your ongoing income streams and what does your FIRE portfolio look like? Etc.?

As far as how you spend the $60k, don't over-react to all the stories of how other people's kids worked their way through school, won scholarships, used tuition reimbursement plans from their employers, etc. There are always parents who were fortunate in that regard and who enjoy jumping in on an opportunity to beat their chests about it. You know your boys best and I assume feel comfortable they are properly motivated and pragmatic about getting through school. If they're not, that brings up a completely different question.

As far as the aspects of working another year...... Will it increase your pension? Will it push out starting SS a year? How does it impact health insurance costs before Medicare? Are there things you can do to minimize the negatives such as the commute, the stress, the sedentary environment? Example: You break up the commute buy stopping at the health club 3 days a week. Get professional help regarding the excessive drinking?

Is there anyway your DW can do something to help with this financially? Or just take on some additional responsibilities at home so you can spend time at the gym and perhaps feel less stressed?

 

[jazz4cash]

We can sustain a $60K hit but, it bumps the needle down in our retirement plan.

$60k works out to $200/mo at 4%. As others suggest re run your numbers reduced by 60k. There should be several ways to account for $200/mo. Maybe a less stressful gig. At any rate it’s not worth sacrificing your well being.

 

[travelover]

Maybe your kids can pay you back later, then it isn't really an expense.

 

[jollystomper]

As much as you may love your children, your health comes first. If your job is driving you to drink too much, that is you health on the line. It might kill you to keep that stress going for another 2 years... and how is that really helping your kids?

I would really check if your son has exhausted all other possible means of funding his education. I did not see a mention of other scholarships he has applied for. And, at his age and with this economy, it might be better for him to work while he goes back to get his degree - it make take him twice as long, but it might be better in the long run.

While DW and I always agreed we would fund our kids college education, that came with expectations that, if not met, meant bye bye generous funding. When our youngest went to college we told him to really try to get his degree under 5 years/10 terms, as I would be retiring in that time frame, the costs were being paid out of my job salary, and no guarantees beyond that. He has about a year to go but is taking more time off to work... so now that I am retied, I told him he needs to figure out how he is going to fund those last 2 terms... we will help a bit but not nearly as generously.

 

[cooch96]

I’d stick with your RE plan. If that $60K comes into play, it will happen much further down the road. Said another way, it’s probably the difference between going broke at 90 instead of 92. By then your kids will be successful enough to help you out (yeah right). Either way, those two years of your life, IMHO, are not as valuable as the next two and I wouldn’t want to spend the next two at work.

All being said knowing that your FireCalc numbers will likely still be above 95%.

+1. 99% is awful high. Nothing in life is certain.

Is your 99% success rate based on a minimum, ascetic budget, year after year, for the rest of your life; or could you tighten the belt (less travel, less eating out) for a year or two? Anything over 80% with a discretionary budget is pretty good gambling odds.

 

[Chuckanut]

Depending upon what one wishes to do for a living there are other ways to fund college besides student loans. For starters, choose a public college near home and save a ton of money since you provide them with 'free' room and board. A friend of mine got his MD courtesy of Uncle Sam - Uncle put him through med school, he worked as a Navy doctor for 4 years and did two more years of public service medicine on an Indian Reservation. Another friend joined the Army and they put her through nursing school. One woman I knew managed to patch together a number of small scholarships and used them at the local Community College.

Several young men I know actually worked while going to college. GASP!

 

[pb4uski]

+1. 99% is awful high. Nothing in life is certain.

Is your 99% success rate based on a minimum, ascetic budget, year after year, for the rest of your life; or could you tighten the belt (less travel, less eating out) for a year or two? Anything over 80% with a discretionary budget is pretty good gambling odds.

Good point... if OP reduces starting portfolio by $60k it changes the 99% to what? 98%?

To me anything over 95% is fine.