Age 47, software engineer, ready to early semi-retire, but one big variable...

[militaryman]

When we started out "child rearing" and marraige life we set our "needs" budget to operate off ONLY my income.

Pretty tough in that I started at WG08 in federal Gov. but we stuck to it with the idea that DW would work for "extras" only and often she would not be working at all.

Now that the oldest is graduating HS my DW looked at the local colleges and found a good one that offers 100% tuition remission for employees and dependents. She took a position lower than what she was working at (less pay) but now, college is the kids option.... Get good enough grades to get into the college Mom works at or foot the bill yourself. We agree to pay books and fees (which actually totals up to about what a community college charges for tuition so if they wanted to go to comm. college we would pay that I guess) -- But if you wanna live on campus that is on you. The oldest is enrolled and starts in the fall and even though we are only about 12 miles from college she wants to live on campus and has elected to work parttime to pay for that. (she is welcome to come home and stay for free anytime) She has half year saved already so this has been a great life lesson for her and we are PROUD.

The younger freshman HS student is far less goal oriented and I have no idea if she will make it to the college stage.

So basically I say -- check all your options -- We would never have qualified for "need based" scholarships so we found another way to get out of tuition. I think that in the long run the job my DW took will be better for her if she wants to move up as she is now working for a well known private university vs her formal job that was with a community college.

We are also not thiking about having to out off early retirement for college though because I just turned 40 and so DW and I will be about 48 when youngest finishes a BA degree IF she decides to get her act together.

[Dawg52]

Quote:

Originally Posted by Ronstar My parents paid for the first 2 yrs for me at a junior college. Then I was on my own. I think worked well, because it gave me some responsibility and forced me into some financial planning early on.

I also attended a jr college. My summer jobs paid for some and my parents paid some. Pretty much the same for my final 2 years at a state University. They paid one year and I got a loan for my final year. I didn't think anything about it. They didn't get a chance to go to college and I was happy for what they were able to do for me.

I see nothing wrong in offering a similar plan for your son.

[Alan]

Quote:

Originally Posted by headingout Here's where I'd be interested in some personal advice, especially from the experienced parents out there: When you've worked long and hard and produced a happy, healthy, smart 18-year old, how much more do you owe them at college time? Obviously we're going to support him and make sure he gets a decent education at one of our better state schools, as a minimum. But when he starts talking about out-of-state or private colleges, I get queasy at the costs. That could mean several more years of work! Any words of wisdom on this?

We put both our children through college and consider it an excellent investment. However we did say that we would pay for in-state public schools. DD wanted to go a school in an ajoining state but they offered her a place with in-state fees and we were happy to pay that even though an in-state school in our state would have been a little cheaper. No regrets, she graduated with a 4.0 GPA in computer science and got an excellent job as a sofware engineer with IBM.

DS had the same options, had an offer from another ajoining state which also offered in-state fees but he opted to stay in-state anyway. Again, very pleased to have been able to put him through college (he graduated exactly 1 year ago and is gainfully employed at a bank).

[Calgary_Girl]

My mom and dad paid for 4 years of University for me and my sister. The ground rules were anything beyond that, we were on our own.

DH wasn't so lucky - he footed his undergrad and his MBA degrees himself since he was being raised by a single mom and his dad was basically a deadbeat.

We opened up an RESP (similar to a 529) when our daughter was a month old to help with University tuition. She's only 22 months old but we already have $6600 saved The last thing I want is for her to be tied down with student loans...

[haha]

Quote:

Originally Posted by headingout Hi everybody! I appreciate all the friendly and informed posts here and hope to contribute as well. I'm 47, a software engineer, married, with one son -- a junior in high school. We own our house outright, no debt, have a total investment portfolio in the high 6 digits, which I've managed myself for 10+ years. I've worked more than 20 years at a generally decent, medium-sized corporation. But the technical work itself has been incredibly stressful for me (picture working calculus problems all day long when you don't like calculus), and I'd have left long ago if not for putting my son through private school. My wife and I are very frugal and track our expenses carefully. We could probably semi-retire later this year, given some part-time work consulting and teaching, except for one big variable: college. Here's where I'd be interested in some personal advice, especially from the experienced parents out there: When you've worked long and hard and produced a happy, healthy, smart 18-year old, how much more do you owe them at college time? Obviously we're going to support him and make sure he gets a decent education at one of our better state schools, as a minimum. But when he starts talking about out-of-state or private colleges, I get queasy at the costs. That could mean several more years of work! Any words of wisdom on this?

Have him apply to the Ivies. They recently revamped scholarship programs such that middle income parents often pay nothing.

Whatever he can't get in grants, let him take in loans. Then he can discover if he has enough confidence in himself and in his work ethic and in the efficacy of an Ivy degree to underwrite whatever work will be required to pay off his debt.

Most kids will be happy to sign Dad on for anything. Not that they are bad, just kids.

Here's a story to give you pause. Last weekend I attended an event with a lot of recent Ivy graduates. I talked at length to a young woman who has been out for 4 years or so. She has an honors degree in math and computer science. She is personable and articulate, and has good personal hygeine. Still she has not been able to find a professional level job. She works with no benefits and generally poor pay as a math tutor for a local chain.

She is considering returning to school to start over as a pre-med.

Ha

[Grizz]

I've got a different sort of strategy for your consideration. Have your son apprentice in a trade for at least a couple of years. Mechanic, electrician, plumber, welder, auto body, whatever. Yes, it is blue collar, and yes, it is hard physical work. If he or you thinks that it is beneath him to get dirty and physically tired while working then it is likely even more important that he do something like this.

It will virtually guarantee that your son ends up a well rounded person with a strong work ethic and the ability to pay some of his own way with a reasonably well paid skill to fall back on should he become disenchanted with his college courses or end up with a skill that suddenly isn't in demand. He'll definitely appreciate the sacrifices that you are making for him, and he will be about 21 when he goes to college. If he is anything like me, by 21 he'll probably be able to tone down the partying and make a better judgement as to where his interests lie than at 18.

[RunningBum]

My parents had no money set aside for college. There simply wasn't money in the budget. Two of five of us went to college, and pretty much paid our own way. I was fortunate enough to get scholarships to cover tuition and books, and I think my brother got one semester paid. I made it through and certainly gained an appreciation for LBYM in college, but it could be stressful. Also when I hear some people talk about the college experience, I think about how I basically attended classes, crammed for tests and worked hard to finish my programming assignments, and worked at jobs. Wasn't a whole lot of time for the college experience other than football and basketball games. I rarely just hung out around campus. Oh, I partied hard too, but a lot more with co-workers and townies than other students.

My brother dropped out after nearly four years and a switch in majors, and a need for real income. He's done well for himself, but probably would've done better with a degree.

I suspect one of the other three siblings might have gone to college had it been easier. The other two didn't seem interested, but I don't really know. I know one is resenting the ceiling she is hitting now because of not having a degree.

I guess my point is that while those who paid their own way in college and finished may be better for it, there are probably lots who would've done better with a college degree had they been able to get some help.

For my daughter, who's a month away from deciding where to go, we're going to pay all normal expenses for a public school. I've told her if she wants to go to a private school, she needs to make a good case for it, like a much better program for her area of study. Also I'm not sure how hard she's been working to apply for scholarships. If it's all talk and no action, she's likely going to be looking at a loan if that's what she wants. Fortunately, she's been accepted to one decent public school, and her first choice is another, and I think she has a lot better chance of getting in there than the two privates she applied to.

[bizlady]

Our daughter (only child) graduated 2 years ago. We told her we would pay her expenses but she had to get in and out in 4 years. She did it in 3 1/2.

We were in a position to pay her expenses, so that was fine. Under no circusmstances would I recommend jeopardizing retirement. A possible delay--maybe.

Our daughter came to us within the pat month and said "thank you" for paying her expenses. She is recently married, and they are seeeing the very real struggle that many of their friends have paying back college loans, and trying to get houses, cars etc. Most of their frineds have debt of $25000-40000.

There is no right answer for everyone. It's what you can do, what you choiildren have done and can do, and what your and their long therm goals are. But at 18, you have largely fulfilled your obligations. You do not OWE them an education. But ongoing support, whether financial or emotional is key to long term success.

[Walt34]

Quote:

Originally Posted by Ronstar My parents paid for the first 2 yrs for me at a junior college. Then I was on my own. I think worked well, because it gave me some responsibility and forced me into some financial planning early on.

That was my route as well. I worked full time during the summer and part time during the school year then full time doing heating & A/C service until I started with the police department. Finished the BS part time along the way. I could have done it a lot sooner but I was busy playing with motorcycles, an airplane and girls.

[AdventuresAddict]

I think you've got to do your planning step-by-step:
1) Ascertain the retirement fund you need for you and your wife first. Anything beyond this can be allocated to things like additional money for things like discretionary spending, children's edu, etc. This depends very much on the LOCATION of your retirement, and your LIFESTYLE. If you'd retire in affordable places like South America, rural USA, or Asia, you'd need less. If you want to become a Perpetual Traveler, traveling from country to country or county to county for the next 20, 30 years, then you'd need budget for the transportation and temp accommodation. But, the good thing is you may not need to keep your present house, which could be sold. To provide lifetime income, I suggest you have 2 streams of income: insured stream to provide survival income, and variable stream to provide additional income. You should buy an annuity to provide for your and your wife's survival income needs, say US $1000/m. The rest can be invested in a balanced portfolio. Experts suggest that a 'Sustainable Withdrawal Rate' is ard 4% pa. With this portfolio, you have more liquidity, but the value of it depends on the market value of your portfolio.

2) Ascertain whether you have been sufficiently insured against unexpected events like costly illness. Budget the premium that you need to pay every year for the insurance. Some insurance policies have level premium rates, while others have escalating premium rates. Set aside a fund for insurance premiums. You wouldn't want a major illness to deplete your retirement nest egg.

3) Then, research on the options of college education available. You could, for example, pay just US$10,000 for an online, 4-year, accredited bachelor degree program, or more than US$200,000 for another 4-year on-campus bachelor program at a private university. The difference is more than 10 times. Nobody can decide which is better. My personal opinion is that, if it's just a general degree that your son wants (not to advance to medical school), then you shouldn't spend too much on his bachelor's degree. The difference probably won't pay off in at least 5-10 years. Rather, think of the whole education plan he has in mind. If he wants a master's, then think of the most cost-effective way. For example, he could take an online bachelor's degree, and work part-time during the 3-4 years (he has flexibility to complete it in less than the standard 4 years). By the time he graduates, he'd have an accredited bachelor's plus 3 years' work experience. He may apply to study for a master's at a leading Canadian university (eg Toronto, British Columbia, Alberta or Waterloo University) for probably much less cost. The total cost of this plan may be less than US$60,000. And, he'd probably be earning some money along the way as a part-timer. The more important advantage, though, is he won't finish university as a greenhorn. But if he wants to become a doctor, then he probably wants an on-campus education in biology, chemistry, etc. and the tuition for an MD is going to be quite high, and this may eat up 50% of your life savings.

[gryffindor]

A very difficult decision.

My parents did not support me through college, although at the time I thought they should. As a result, went into a fair amount of debt to go to undergrad, medical school, and business school around 65k. It was limited due to a combination of going to state schools for undergrad and medical school,working and a fellowship that covered business school.

I'm not sure that kids can fully appreciate the true financial tradeoffs involved in funding school. I am planning on putting a fixed amount thats available (probably something akin to 100% of full state school tuition) and letting my children make the tradeoff. But I think kids need to make some of the tradeoff.