Delay RE to help children grad school costs?

[Rustic23]

I would not! I agree with others, "If they want to go they will find a way"

In fact I believe you do them a disservice. First it keeps them from the real world. Second, I believe the true value of an advanced degree is when you put it with three to six years of experience. Kick them out after four years and have them pursue a career. They will be better off in the long run and so will you.

I also think you will be surprised by you financial condition in retirement. We have considerable more disposable income than I though we would have ten years ago.

 

[youbet]

Why not compromise?

OP and his DW make a handsome income of $220k and think they can FIRE in 3 yrs at 53 yrs old.

Because they make good money, OP is tempted to work additional time to help the kids with grad school. He mentioned several years, but how about just one more year?

$220k minus taxes and work expenses might net about $150k. If the grad school aspirations are practical and sincere and it would make OP and his DW feel good to help in some way, why not work one more year, to 54 yrs old, and use the $150k to help the kids with grad school? This would be significant to the kids yet OP and his DW are still fully FIRE'd at 54.

I think the fact that OP's family income is high does come into play. The FIRE delay is short vs. the nice benefit to the kids. And the fact that FIRE still comes at 54 yrs old, a pretty nice age to be out of the harness, is in the equation too. If OP's income was small, then the sacrifice of a year of FIRE time would look large compared to the possibly inconsequential benefit to the kids.

Having a high income, especially if the high income has been predominantly late in your career, does make it difficult to pull the plug and begin FIRE. And that's whether you'd enjoy spending the extra money on the kids, on yourself, on charity or whatever.........

 

[Rustic23]

Here is another thought. BIL's wife died of cancer less than two years after he retired. She was only 60.

 

[ivinsfan]

Why not compromise?

OP and his DW make a handsome income of $220k and think they can FIRE in 3 yrs at 53 yrs old.

Because they make good money, OP is tempted to work additional time to help the kids with grad school.

$220k minus taxes and work expenses might net about $150k. If the grad school aspirations are practical and sincere and it would make OP and his DW feel good to help in some way, why not work one more year, to 54 yrs old, and use the $150k to help the kids with grad school? This would be significant to the kids yet OP and his DW are still fully FIRE'd at 54.

I think the fact that OP's family income is high does come into play. The FIRE delay is short vs. the nice benefit to the kids. And the fact that FIRE still comes at 54 yrs old, a pretty nice age to be out of the harness, is in the equation too.

If OP's income was small, then the sacrifice of a year of FIRE time would look large compared to the possibly inconsequential benefit to the kids. Having a high income, especially if the high income has only begun late in your career, does make it difficult to pull the plug and begin FIRE. And that's whether you'd enjoy spending the extra money on the kids, on yourself, on charity or whatever.........

Most people earning 220K put a lot of time and energy into the job, energy they can't use for other things. And after grad school, maybe it will be a downpayment for a house or an expensive wedding for the kids. But in my case I basically disagree with the premise of promising to fund grad school. Some things you have to figure out on your own if you want to be a grownup.

 

[samclem]

I also think you will be surprised by your financial condition in retirement. We have considerable more disposable income than I though we would have ten years ago.

If you say you won't help, you have the option to help at that time, if you wish. Then, it will be accepted as a wonderful gift.

Along these lines: If you don't commit now to helping them, they will be forced to make a real cost/benefit decision as to whether it is worth going and what the best time will be. They'll examine the options of getting it paid for by an employer, working as a TA, etc. After they've made these decisions and figured out how to get the best bang-for-the-buck (for real, since it's their money they'll be spending/working for/borrowing to pay back), if it looks like they have made some prudent decisions you can make an offer of assistance (as Rustic23 says, you may be surprised by the assets you'll have available in your post-ER budget). That's likely to be far less expensive for you (they've cut back as far as possible) and more fully appreciated by them, as well. OTOH, if it looks like they've chosen to get an MA in something non-remunerative just because it seemed to them a natural extension of their BA studies (i.e. they don't want to face the world and prefer to remain in the student cocoon), you can just keep your wallet closed, let nature take its course and have no responsibility for being an enabler.

 

[youbet]

Here is another thought. BIL's wife died of cancer less than two years after he retired. She was only 60.

I'm sure you must regret not retiring earlier than you did. But water under the bridge is water under the bridge. Time to look ahead and live the remainder of your life.

 

[daylatedollarshort]

Why not compromise?

OP and his DW make a handsome income of $220k and think they can FIRE in 3 yrs at 53 yrs old.

Because they make good money, OP is tempted to work additional time to help the kids with grad school. He mentioned several years, but how about just one more year?

If one of our kids asked us both to go back to work for a year to fund grad school for them I would not do it. The OPs and spouse's combined salary is $220K so that is likely 4,000+ hours of work plus overtime and commute time between them they would give up. Personally, I would do it for something like a kidney transplant, but not grad school. I've tasted freedom now, it is too late for me to go back to work full time at a megacorp type job unless I really had to.

 

[youbet]

Most people earning 220K put a lot of time and energy into the job, energy they can't use for other things.

j That is the family income, not OP's. But in any case, my suggestion was based on my impression that OP was vacillating between ER at 53 or working longer to potentially help the kids with grad school. I'm simply suggesting he could "do it all" by putting a limit of one year on the extra work. At their salary level, that would put some meaningful money for the kids (if needed) and they'd still be out of the harness by 54. It doesn't need to be a "no help whatsoever" or "work until you drop" kind of decision.

And after grad school, maybe it will be a downpayment for a house or an expensive wedding for the kids.

Perhaps you're referring to yourself, but I didn't pick up on that kind of issue coming from OP.

But in my case I basically disagree with the premise of promising to fund grad school. Some things you have to figure out on your own if you want to be a grownup.

You don't have to promise (and OP did not say that) to fund grad school a priori, but you could take the steps (if the steps are not too painful) to have the money available if the situation warrants.

Sometimes it's fun to help. DS married right out of college. He and his DW are both engineers out of a top ten engineering school. They wanted kids and started a family fairly soon and gave us our three cherished grandkids. When DS wanted to get his MS (employer paid tuition) we gladly did some babysitting and chores around the house. It's not easy being a dad, an engineer in a competitive work environment and a grad student in a competitive MS engineering program all at the same time. And as a reward for "doing it all", I bought him a new car when he graduated. None of this kept him from being grown up or "figuring out on your own." It just allowed him to complete a tough MS degree while still young as opposed to waiting until the kids were older. He's a big boy, an engineering manager with a solid company, a great dad and still a great son (despite us having coddled him with help getting his MS).

 

[Fedup]

Interesting, I don't mind going back to work, but it has to be the same job before the last one.
But I don't think $220k of income is a lot of money. Not from my point of view, I'm from the HCOL in California. After tax and savings for retirement, you'll probably down to $120k-$150k anyway.

Regarding down payment for a house and wedding. My goodness, when does it ends? College tuition for grandkids?

 

[evilanne]

I agree with Dash man--a graduate degree is typically more beneficial after working for several years in a chosen degree field. With many employers paying for or subsidizing advanced degrees, working to get some experience makes most degrees more meaningful.

When I finished college, the last thing I wanted to do was to go to graduate school. I guess it depends on what their career goal is and what what the anticipated payoff would be with a grad degree. There are some degrees that make a big difference in the available jobs and pay upon graduation It is really a cost/benefit analysis that should be done to see whether a grad degree even makes sense.

What is the difference in pay for someone with a undergraduate degree vs a graduate degree for someone starting out? A graduate degree may look good on a resume and be a slight competitive advantage but it may not result in any more pay at the entry level. What are employers in that field looking for in new hirer? Depending on the job

Finally, some are professional students that like school or are comfortable with going to school as it is what is familiar. Getting a job can be scary. Some may be fearful of entering the work force. Are they avoiding entering the work force as long as possible. If mom & dad are paying, they have no motivation. How much or what are they will to do to cover the costs? How much are they willing to sacrifice (working, applying for grants/ scholarships, work-study etc.) in order to get the advanced degree--it should be more than what they expect from you?

 

[youbet]

Regarding down payment for a house and wedding. My goodness, when does it ends? College tuition for grandkids?

Now what's wrong with paying college tuition for grandkids? It makes me feel good and I don't see a downside.

 

[Fedup]

Now what's wrong with paying college tuition for grandkids? It makes me feel good and I don't see a downside.

I didn't say anything wrong with it. But I think too many hands out makes me sick when I think about. I guess my husband and I are in the category we didn't need that much hand out. We paid our own college education, our own wedding at a 5-star resort, our own graduate schools, college tuition for our kids. We turned out ok. And we love our parents, had the best relationships with them when they were alive. In other words we never ever resented them. What's wrong with that? I would like my kids to do that too. I hate the entitlement attitude.

 

[laurence]

We're going to provide a fixed amount of college money for the kids, we want to support them, but not write a blank check so they start getting used to the real world. Probably four years tuition for a University California or equivalent costs. If they need to do a five year term out of state, well, this is the money we can contribute, good luck! My sister in law was heavily financed and went to grad school until 38....

 

[LRDave]

Pay for grad school too? - FTS (as the youngsters would text...)

 

[retire2020]

I've full six years tuition saved for all my three kids in their 529 plan. But they do not know that and I'm not planning to tell them until they all graduate and pay me back their entire tuition bill....Here is my plan.

I've been telling all my three kids that they've to take a loan for their college education to keep their skin in the game. My daughter just finished three years of college and three more to go(PharmD) and have been taking limited unsubsidized stafford loan and telling her that rest is being paid from home equity loan. I've told her that if you do not pay back loan to me, we'll loose our house. Once she graduates, I'll pay her stafford loan and ask her to pay me back entire tuition bill over time so she can save money on interest. It'll be deposited into her own brokerage account. Once all three kids pay back, I'll tell them the truth and give that money to them. Hopefully... By that time they are all matured and would have learned the lessons of savings from this experiment.

 

[Fedup]

My goodness, it sounds like you don't have any faith in your kid's. Also for 529 account, if you don't use it to pay tuition, how is it going to work out afterwards.

 

[Dash man]

I've full six years tuition saved for all my three kids in their 529 plan. But they do not know that and I'm not planning to tell them until they all graduate and pay me back their entire tuition bill....Here is my plan.

I've been telling all my three kids that they've to take a loan for their college education to keep their skin in the game. My daughter just finished three years of college and three more to go(PharmD) and have been taking limited unsubsidized stafford loan and telling her that rest is being paid from home equity loan. I've told her that if you do not pay back loan to me, we'll loose our house. Once she graduates, I'll pay her stafford loan and ask her to pay me back entire tuition bill over time so she can save money on interest. It'll be deposited into her own brokerage account. Once all three kids pay back, I'll tell them the truth and give that money to them. Hopefully... By that time they are all matured and would have learned the lessons of savings from this experiment.

I'm not sure, but this strategy may give you an unpleasant tax hit. Don't withdrawals from a 529 have to be made in the year of the educational expense?

 

[retire2020]

My goodness, it sounds like you don't have any faith in your kid's. Also for 529 account, if you don't use it to pay tuition, how is it going to work out afterwards.

Nothing to do with faith - thats your opinion not mine. Just don't want them to slack. Tuition is being paid from their 529 plan - home equity loan is a made up story.

 

[retire2020]

I'm not sure, but this strategy may give you an unpleasant tax hit. Don't withdrawals from a 529 have to be made in the year of the educational expense?

Home Equity loan is a made up story I tell my daughter. Actual tuition is being paid from her 529 every semester. Stafford loan covers about 20% of the tuition and will total around 25K by the time she graduates. I'll pay that 25K at once from my own account and leftover, if any, money in 529 will go to her kids in future.

 

[Fedup]

Nothing to do with faith - thats your opinion not mine. Just don't want them to slack. It's being paid from their 529 plan - home equity loan is a made up story.

You know your kids best. But I always tell my kids the truth and there are no slacking. I even got 1/2 of the last quarter tuition back because the youngest kid is only taking half load to graduate. Some of her friends graduated one quarter earlier.
I guess it's different style. I'm always tell them the truth, but if they slack off, they will face the consequence of slacking. They are on their own. And I always mean what I say.

 

[laurence]

Yeah I wonder what kind of fallout would come if my kids found out I lied to them about something big? Just seems like a lot of work. I mean, telling your kid if she fails her parents are homeless sounds like something from a sitcom, I'm not sure she enjoys the extra pressure.

 

[Cobra9777]

I've full six years tuition saved for all my three kids in their 529 plan. But they do not know that and I'm not planning to tell them until they all graduate and pay me back their entire tuition bill....Here is my plan.

I've been telling all my three kids that they've to take a loan for their college education to keep their skin in the game. My daughter just finished three years of college and three more to go(PharmD) and have been taking limited unsubsidized stafford loan and telling her that rest is being paid from home equity loan. I've told her that if you do not pay back loan to me, we'll loose our house. Once she graduates, I'll pay her stafford loan and ask her to pay me back entire tuition bill over time so she can save money on interest. It'll be deposited into her own brokerage account. Once all three kids pay back, I'll tell them the truth and give that money to them. Hopefully... By that time they are all matured and would have learned the lessons of savings from this experiment.

Good grief! That's so complicated, I had to read it three times, and I'm still not sure I followed the bouncing money ball.

In our case... no convoluted, multi-year deception schemes; they knew we had the money. Regarding "skin in the game", we paid their tuition and fees, but subject to ongoing conditions. They knew the money would stop instantly if any of several criteria were not met. These were mainly related to working summers to cover a portion of living expenses, GPA, course load, total time to graduate, internships, and job interviews. There was also a nice bonus at the end for exceptional GPA and they both earned it.

 

[Fedup]

Plus there are fees with these loans, I'm sure.

 

[Texas Proud]

Plus there are fees with these loans, I'm sure.

Not sure... may have to ask DS.... but I think the gvmt loans are just interest... either deferred or not accrued according to where you land on their scale....

 

[Fedup]

Not sure... may have to ask DS.... but I think the gvmt loans are just interest... either deferred or not accrued according to where you land on their scale....

I took out a loan before, they charged me at least 1%. But this was a while back in early 80s for graduate school. Things might have changed since.