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Not saving for retirement to pay for school?
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Anonymous
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If you are not maxing out your 401k's and IRA's to pay for private school, what are your plans for the future? How old are you? Plan B? DH and I are 42, paying for two private tuitions and not fully maxing out 401k's. I think I am the only one doing this crazy thing but I would like to know if others are making the same sacrifice.
Part of me feels that I will be working until I'm 80 so what difference does it make. 
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Anonymous
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We actually refuse to compromise on the 401k-
I will eat beans for dinner, shop at thrift store, but will not forfeit fully funding 401ks up to tax-exempt amount.... Is there ANYTHING you can cut? I think this is important. |
Anonymous
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That is indeed a crazy thing.
You may think you'll work until you are 80, but the best-laid plans can go awry. My mother is 72 and has severe dementia - thank goodness she saved for retirement. You won't find a single financial advisor out there who would agree with what you are doing. |
Anonymous
| Sounds like you can't afford a private school education. Seriously, this is a bad, bad move OP. Either find the money elsewhere in your budget, or reconsider -PLEASE! As one PP said, you may not be able to work as long as you think and you may need those funds. Education is a wonderful gift to give your children. Private schools are not the only way to make insure they are well-educated. |
Anonymous
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OP here, I am contributing slightly less than the max and DH works for a company with a pension and company contributions. He contributes what they match. We have some consumer debt to payoff in the next few years and then we will be able to contribute the max. We were hit hard by layoffs a few years back and are working ourselves out of a hole.
On a positive note, college tuition is funded and done and growing nicely. 100% agree w/12:53; private isn't the only way to ensure that the kids are well educated. |
Anonymous
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well i'm not saving much for retirement nor anything at all for college but the busy body moms who zillow still think i don't deserve any FA since I am a homeowner.
tuition takes up all free cash flow, despite the fact i don't even pay fully. |
Anonymous
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Somebody once told me that my kids can get financial aid for college, but I won't be able to get it for retirement. And while I know it may not be easy to obtain aid for private school, there are often tough ways to spend less in order to pay for retirement AND tuition.
My car is 10 yrs old, our home is the same tiny rowhouse I've owned since I was single and bought 13 yrs ago (I share the one upstairs bathroom with my husband and 2 boys), and I just don't have the cutest clothes at the party. I occassionally covet some nicer things and recently broke down to buy a new $200 handbag (my first in 12 years), but generally speaking I don't notice or get bugged by not having all the material items that my friends have. And I wouldn't say I'm deprived, but everything is relative. So maybe there are some areas that could be trimmed to make the 401K a higher priority without giving up the tuition. I do agree that both of those are important, but the Tory Burch flats are not (fill in your own item since I have no idea if you prefer Neiman Marcus shopping, organic food, hair stylists, or $$$ meals out). Sometimes less of those things add up to another $3K or so a year. And I would highly recommend www.mint.com if you need to pay closer attention to the details for where the money is actually going. |
Anonymous
| OP: We're in the same boat, although younger. We make good money. We're contributing beyond the employer match to 401k's, tho not maxing out. Our income should increase over the next 3 years at which point we will max out the 401k's. We also do not have cute clothes - in fact most of our suits, which we wear daily, are 5+ years old. i've never bought a $200 handbag ($25 at Target, generally), our cars are paid off and have been for years, and my financial tracking is waaaaay more detailed than mint.com would allow. I may be rationalizing, but I feel that if your realistic projections for your retirement timelines, needs and funding work despite not maxing out the 401k (ours do b/c of pensions), you'll be fine. Or at least, that's what I tell myself, so you're not alone! |
Anonymous
| How is it that you don't qualify for FA? Put in, like others, the max on 401K and then apply for FA! |
Anonymous
| 401K accounts have to be disclosed on FA apllications and DO count toward your financial resources. |
Anonymous
How do they count? I mean, you can't tap into 401Ks without penalty, right? |
Anonymous
| I used the SSS application which most privates in this area use and it did not ask about 401K savings.... |
Anonymous
OP here... same as you! No Tory Burch, needless markup, whole foods or hair salons. Just digging out of a mighty big hole. P.S. - handbags are borrowed from a friend when I need to look fancy. 
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Anonymous
| One very nice handbag is one every needs. |
Anonymous
Well, you should have disclosed your 401(k) savings plans. If you didn't, you are a FA cheat. See this: https://www8.student-1.com/SSS/forms/SSS_Required_Documents_Worksheet_English.pdf SSS requires the disclosure of "payments to tax-deferred pensions and savings plans," "income from tax-exempt investments," and "IRA Keough/SEP information." I disclosed all of the above, and I did not qualify for FA. If you have money socked away in 401(k) accounts and did not disclose, shame on you! |