Old Man Dad Club trying to figure out $$ needed

[P.S.]

Not sure if already commented on and not sure where you are located, but I think $100k/child way underestimates private k-12. In addition to tuition, there’s pre-care and aftercare (if both parents working), meal plan (a good school will have great service and packed lunches won’t compare), bus plan, after school activities, great summer camps that your kid will want to do, school trips, and depending on how deep your pockets, annual fund drive. You will also want a wallet of steel to resist the parental pressure of country club/yacht club/expensive hobbies/2nd home/3rd home/personal island/personal plane/you get the idea.
The value of a good private school really shines during a pandemic though.

 

[P.S.]

Oh wait, I think I misunderstood. $100k for HS only may still be underestimating.
Another thing to consider is if you value/can afford private education, then why would you not start at K or 1st? Arguably, front loading may be more worthwhile than backloading.

 

[hilltide]

A lot of great points. Thank you everyone. Our private schools here are about $7500 a year. My wife is a Stay at home mom and hope to continue that until baby is older. I have 5 to 10 years before I retire so plenty of time to make it all happen.


Hope to take care of her hobbies out of the monthly. We are not the Country Club type but I certainly like nice boats as we live in Florida! It's my hobbies I am worried about in retirement. We have been doing good avoiding lifestyle creep but it is not easy.

 

[hilltide]

I don't think so, and I believe your targets are about right.


Our intent at the time was to lock up the money and ensure a high degree of certainty there would be money for them to go to college. I look at the 10% penalty on earnings of non-qualified withdrawals as insurance.

We stopped at about $50K each, and in the ensuing 15+ years, the accounts have more than doubled. I now have to figure out how to deal with the excess .

A fellow Gator! Awesome. Offense looks great, Defense needs some work. Go Gators. I like the idea of funding max 50k early and letting it go. Locking it up will provide me a piece of mind as well, even with the potential penalty.

 

[hilltide]

The value of a good private school really shines during a pandemic though.[/QUOTE]

I agree with this. Luckily, our local privates are not too crazy.

 

[RenoJay]

When I first had kids I made a spreadsheet of expected annual nut per year, increasing it at college time, factoring in inflation on everything with different rates for health care, college, etc. Then above each year (projected out for 20 years) I put how old I’d be and how old each kiddo would be. This really helped me visualize what I was in for. Then over the next few years I monitored how close my projections were to reality and started to relax and not worry about kid-related expenses. If OP thinks he’ll have $4mm by age 55, I wouldn’t worry too much about the cost of one child.

 

[UKadventurer]

I’m divorced with 2 grown kids. I retired this year at 57 years old. My fiancée is 30 years younger so, unsurprisingly, she wants at least 1 kid. I hadn’t factored having another child into my calcs. I think I’ll push her to get a kitten instead.

 

[Old Microbiologist]

Personally, I had my second child at 42 and I was considered old. At school events I was always asked which child was my grand daughter. It was rough physically as well but I don't regret it. Sadly, we were divorced when she was 13 and was brainwashed against me (her mother became lesbian and some how it was my fault).

I didn't plan nor did I pay for any of either of my children's college tuition. My son went the community college route (poor grades) but was given a free ride from community college if he completed his BA at the affiliated University which he did. My daughter being a gymnast got full scholarship and only had to pay for room, board, and books. Their mother is a very successful corporate attorney in DC but is mean with her money so gave little to either. She, like myself, paid her own way through her degrees. I always worked and was in the Army enlisted until the age of 28 when I went National Guard while I did ROTC and got both my BS and MS degrees both in 2 years by challenging out many course, CLEP tests, etc. I got my BS in 1 year and the same for the MS. Their mother has 3 BA, 6 Masters and the JD all paid for by herself or me.

 

[Hermit]

I had my two kids at 40 and 41. Private school never entered my mind until until junior high. It was private school for both from there through high school. The cost rose from about $6k to $15k per kid when they finished. Count on it continuing to go up.


I did not fund a 529 for the same reasons already stated. We paid for high school and college out of current expenses. My original plan was to use IRA and 401k money to fund college because of my age, but it turned out that was not necessary. I maxed out the 401k when the kids came along and that is what moved me into financial independence. Unplanned large additions to income made it all work out as it did.

 

[NYEXPAT]

I’m divorced with 2 grown kids. I retired this year at 57 years old. My fiancée is 30 years younger so, unsurprisingly, she wants at least 1 kid. I hadn’t factored having another child into my calcs. I think I’ll push her to get a kitten instead.

Based on my experience, that is not a bet I would take!

 

[PatrickA5]

We had our DS when we were both 40. It was tough going to his baseball games at 50+ when all of the other parents were late 30s. But, those were some of the best years of my life and I wouldn't take them back for anything. I semi-retired at 50, and spent the next 8 years hanging out with my son before he went off to college.

According to my spreadsheet, DS's college cost me $108,437 offset by $12,000 in Federal Tax Credits for a net of $96,437. That was for 4 1/2 years at a state college. He should be done in 45 days and I'll have my last kid through college - let the party start!

 

[JeKa]

I'm not keen on 529s. You never know what will happen. In our case, DS decided to forgo college so I'm glad that I didn't have a boatload of money locked into a 529. A couple nephews got full-boat scholarships so only a portion of the 529 money would have been used.

Fund your Roth instead... you'll have more flexibility.

No problem funding a 529 and kids/whoever not using it for school. It will just cost you 10% on the earnings. If you fund it and they use it, it's all tax free.

 

[SecondCor521]

No problem funding a 529 and kids/whoever not using it for school. It will just cost you 10% on the earnings. If you fund it and they use it, it's all tax free.

It will actually cost ordinary income tax plus 10% on the earnings for nonqualified withdrawals. (Plus possibly state income taxes, depending on the state.)

And as I say often, there are exceptions to paying the 10% penalty, so it could just be the ordinary income tax on the earnings. The one I plan to use is the scholarship exception.

 

[Finance Dave]

First off, congrats! It's also great that you are planning and thinking ahead.

Too many things can change between now and then. You never know what will happen with tax laws, health insurance reform, what if you or one of your kids gets a serious illness or needs an expensive surgery?

I think it's great to head towards your plan, but try to remain flexible. Set interim goals, and then if you miss one in, say two years, you can ramp up savings or reduce spending or whatever is needed to get back in line. The nice thing about planning is that you can make adjustments...such as working longer or getting a part time gig in FIRE.

Good luck!

 

[kgtest]

I'm not keen on 529s. You never know what will happen. In our case, DS decided to forgo college so I'm glad that I didn't have a boatload of money locked into a 529. A couple nephews got full-boat scholarships so only a portion of the 529 money would have been used.

Fund your Roth instead... you'll have more flexibility.

I am actually going to take this advice, thanks pb4uski. We have a little in each, but I myself never earned a degree, and I did go into the Military so my actual education costs out of my own pocket over my life so far have been >$3,000 at best and that covered maybe 5 classes of junior college tuition. Work has graciously offered to pay for my degree but I have no desire now.

Just typing that out I can understand a myriad of ways where a Roth would have helped me more than a 529. Speaking of which, I have time to top off this years contribution.

 

[kgtest]

First off, congrats! It's also great that you are planning and thinking ahead.

Too many things can change between now and then. You never know what will happen with tax laws, health insurance reform, what if you or one of your kids gets a serious illness or needs an expensive surgery?

I think it's great to head towards your plan, but try to remain flexible. Set interim goals, and then if you miss one in, say two years, you can ramp up savings or reduce spending or whatever is needed to get back in line. The nice thing about planning is that you can make adjustments...such as working longer or getting a part time gig in FIRE.

Good luck!

Dave is right. There are so many unkowns. I tend to hang-up on the least likely which is ironic. Like oh they will be Conference All Pro sport with huge expenses, or they will go to best private school in town, or they will do the unthinkable and we face huge financial consequence somehow... then I breathe.

The idea of continually dropping more into the "later" bucket every single week has helped us sleep. But best to plan now then be broke later.