This thread is for generally brainstorming and sharing thoughts on the financial aspects having kids in college after retirement.
However I want to focus on the "low(ish) income version", say, where the parents have (or can ensure) an AGI in the mid-5 figures. I'll start with some random thoughts.
I found this
FinAid | Financial Aid Applications | Maximizing Your Aid Eligibility
and one obvious strategy that springs to mind in to try to qualify for the
Simplified Needs Test (so that assets are ignored for FAFSA)
FinAid | FinAid for Educators and FAAs | Simplified Needs Test Chart
so you need AGI less than $50k, and not have any of the many items in the linked chart (e.g. have no Sched D, no foreign tax credit, no reportable HSA activity etc etc).
An even lower AGI will ensure zero EFC.
However I understand that Expected Family Contribution (EFC) is not the amount you have to pay - it could be much more (or less) depending on the college.
I found this (2017-18 - don't know if the next one's out)
https://studentaid.ed.gov/sa/sites/default/files/2017-18-efc-formula.pdf
which pretty much explains the whole FAFSA formula if you trace through the forms and tables. There are marginal rates of up to 47% for income and up to 5.64% (per year every year) on assets. These are very steep slopes that you want to stay below, or else, combined with other things, you could sometimes be effectively at near 100% tax bracket.
However I didn't find any correspondingly transparent account of CSS/Profile formula(s?), and I'm wondering if that's more proprietary and secret. (Is it?) So any specific FAFSA "strategies" may be inapplicable to CSS/Profile, and you can't really know in advance which formula you will be working with, making planning harder.
I did find Net Price Calculators for various colleges. I noticed that the really top colleges could be almost free if you have an AGI like $70k, whereas lower tier private colleges, and out of state public universities are totally unaffordable and not even worth considering (unless you get a merit award instead).
Anyway, it's some years off for us, and I haven't looked deeply yet. Mainly I don't want to get blindsided by some unexpected expense (which could make you need to withdraw more from retirement account, meaning more income, and so higher costs), so it seems to be a long term balancing act.
In our case we'd have 3 kids over 9 years. We do have $50k per kid in 529 (but stopped adding to it some time ago realizing retirement saving should come first) and will have no income sources other than savings (almost all in pre-tax retirement accounts).
I'm interested in hearing from others who are also planning for kids in college after retirement, or are in this scenario now, or have already been through it.
However I want to focus on the "low(ish) income version", say, where the parents have (or can ensure) an AGI in the mid-5 figures. I'll start with some random thoughts.
I found this
FinAid | Financial Aid Applications | Maximizing Your Aid Eligibility
and one obvious strategy that springs to mind in to try to qualify for the
Simplified Needs Test (so that assets are ignored for FAFSA)
FinAid | FinAid for Educators and FAAs | Simplified Needs Test Chart
so you need AGI less than $50k, and not have any of the many items in the linked chart (e.g. have no Sched D, no foreign tax credit, no reportable HSA activity etc etc).
An even lower AGI will ensure zero EFC.
However I understand that Expected Family Contribution (EFC) is not the amount you have to pay - it could be much more (or less) depending on the college.
I found this (2017-18 - don't know if the next one's out)
https://studentaid.ed.gov/sa/sites/default/files/2017-18-efc-formula.pdf
which pretty much explains the whole FAFSA formula if you trace through the forms and tables. There are marginal rates of up to 47% for income and up to 5.64% (per year every year) on assets. These are very steep slopes that you want to stay below, or else, combined with other things, you could sometimes be effectively at near 100% tax bracket.
However I didn't find any correspondingly transparent account of CSS/Profile formula(s?), and I'm wondering if that's more proprietary and secret. (Is it?) So any specific FAFSA "strategies" may be inapplicable to CSS/Profile, and you can't really know in advance which formula you will be working with, making planning harder.
I did find Net Price Calculators for various colleges. I noticed that the really top colleges could be almost free if you have an AGI like $70k, whereas lower tier private colleges, and out of state public universities are totally unaffordable and not even worth considering (unless you get a merit award instead).
Anyway, it's some years off for us, and I haven't looked deeply yet. Mainly I don't want to get blindsided by some unexpected expense (which could make you need to withdraw more from retirement account, meaning more income, and so higher costs), so it seems to be a long term balancing act.
In our case we'd have 3 kids over 9 years. We do have $50k per kid in 529 (but stopped adding to it some time ago realizing retirement saving should come first) and will have no income sources other than savings (almost all in pre-tax retirement accounts).
I'm interested in hearing from others who are also planning for kids in college after retirement, or are in this scenario now, or have already been through it.