Are we stuck for now?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, I've said this before, but you've ignored it. After your last post I feel compelled to repeat myself. You are in your early fifties and have $240k saved for retirement, with no home equity, and a spouse who has a spending problem and enjoys the finer things. You apparently have little to nothing saved already for college, despite the fact that you have 4 kids, some of whom are getting close to college age.

Regardless of what you decide to do with the house, you need to abandon the notion that you are paying for college. You absolutely cannot afford it. I realize it will be hard to tell your kids, and you'll feel like you're letting them down. But there's enough time for them to apply for merit scholarships or take out loans, and you can help them with incidentals. But the idea that you are in financial position to pay for college tuition (never mind multiple tuitions!) is a fantasy. No fancy graph or chart will change that.

If we don't pay for private school ($4200) and we rent for $3000 (instead of $7000 mortgage) that gives us $8200 we didn't have, which is $98,000. Couldn't we save $60,000 for retirement and spend $40,000 on college? (May need a little less or a little more depending on choice of college). Planning on kid one working/doing a paid coop and kid 2 getting merit aid.

I don't think that would be prudent. You are in really bad shape for retirement. You need to save everything possible.

[Anonymous]

Have you thought about community college and then having them transfer to a four year school for their degree? Who cares what their friends think? Who cares what your friends think? Your retirement is more important.

[Anonymous]

Anonymous wrote:Have you thought about community college and then having them transfer to a four year school for their degree? Who cares what their friends think? Who cares what your friends think? Your retirement is more important.

No, but we have thought of in-state tuition, which of course would be quite a bit less than 40,000.

[Anonymous]

You cannot pay full freight for your kids' college. It would be seriously unwise to fund that at the expense of your retirement. You can borrow for college, but not retirement. Time for a come to Jesus talk with your kids.

Best of luck.

[Anonymous]

I feel the urge to make more graphs. 100k a year at 6% minus deferred loans or low interest loans vs. Homelessness, but I can't figure out how to graph homelessness.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, I've said this before, but you've ignored it. After your last post I feel compelled to repeat myself. You are in your early fifties and have $240k saved for retirement, with no home equity, and a spouse who has a spending problem and enjoys the finer things. You apparently have little to nothing saved already for college, despite the fact that you have 4 kids, some of whom are getting close to college age.

Regardless of what you decide to do with the house, you need to abandon the notion that you are paying for college. You absolutely cannot afford it. I realize it will be hard to tell your kids, and you'll feel like you're letting them down. But there's enough time for them to apply for merit scholarships or take out loans, and you can help them with incidentals. But the idea that you are in financial position to pay for college tuition (never mind multiple tuitions!) is a fantasy. No fancy graph or chart will change that.

If we don't pay for private school ($4200) and we rent for $3000 (instead of $7000 mortgage) that gives us $8200 we didn't have, which is $98,000. Couldn't we save $60,000 for retirement and spend $40,000 on college? (May need a little less or a little more depending on choice of college). Planning on kid one working/doing a paid coop and kid 2 getting merit aid.

First, even in that scenario, you need to dump everything into retirement savings. You've squandered 25-30 years of investment earnings, and now have 15 or so years to accumulate what typically takes people 40 years to save. If, as PP said, in 5 years you are in a good (or, I guess, better) position, you can pay off some loans. Second, and I mean no disrespect by this, the assumption that you are going to suddenly realize $100,000 in savings per year is overly optimistic, to say the least. You got where you are because of a lack of financial discipline and profligate spending. That's typically not something that goes away with a snap your fingers. For starters, you have to get everyone on board with this - what does your husband say? Is he OK with renting the $3000 house? Because you're going to be waving the Joneses goodbye. And every if everyone "agrees" to the plan, there are still going to be bumps along the road. If you commit to tuition you'll have to pay it, and then you won't be saving for retirement. Better to help them out later, if your circumstances permit. Good luck.

[Anonymous]

Op is doomed to fail. If with an income like that they have jack shit saved, they aren't going to have the discipline to save $1k a year... forget $100k. They will end up with no money at 65, no home equity, be forced to work until they can't and then end up reliant on their children just as they enter their child bearing years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, I've said this before, but you've ignored it. After your last post I feel compelled to repeat myself. You are in your early fifties and have $240k saved for retirement, with no home equity, and a spouse who has a spending problem and enjoys the finer things. You apparently have little to nothing saved already for college, despite the fact that you have 4 kids, some of whom are getting close to college age.

Regardless of what you decide to do with the house, you need to abandon the notion that you are paying for college. You absolutely cannot afford it. I realize it will be hard to tell your kids, and you'll feel like you're letting them down. But there's enough time for them to apply for merit scholarships or take out loans, and you can help them with incidentals. But the idea that you are in financial position to pay for college tuition (never mind multiple tuitions!) is a fantasy. No fancy graph or chart will change that.

If we don't pay for private school ($4200) and we rent for $3000 (instead of $7000 mortgage) that gives us $8200 we didn't have, which is $98,000. Couldn't we save $60,000 for retirement and spend $40,000 on college? (May need a little less or a little more depending on choice of college). Planning on kid one working/doing a paid coop and kid 2 getting merit aid.

Yes.. And I'm not PP....but honestly I think your retirement needs to become a major priority ASAP. I'd have them take loans and if in 4 years your assets are doing well offer to pay off a portion or all. For the sake of making it up, let's say you can turn that $400k into $700k in the next 5 years, wouldn't you be better off with that than a paid off college bill, particularly given your ages? Put differently if one of you loses a job in 5 years, you can't borrow back against the college you've already paid off. Right now you need to take a massive leap into the "holy shit I'm retiring in ten years and have nothing" pool.

- graph guy

+1

Holy crap, OP, do not even think about paying for your kids' college educations, or any more private school, for that matter.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here: we did refi our first mortgage so the interest rate is about 4 percent and our payment with property tax is $5669. but we have a second loan for about 130,000 and it's at 9 percent and the refi bank wouldn't roll it in to the first loan. That payment is $1303. If we sell we'd end up paying maybe 60,000 to the realtor and maybe $30,000 in closing costs, not to mention moving costs. We'd also lose our mortgage interest deduction which is pretty significant.

To a previous poster. I doubt we could sell for more than about 1.25/1.27m

This is the best time for you to get out of this mess. If you hold on, there is a significant risk that you're gonna ruin your life with the amount of mortgage you have to pay (unless your HHI is extraordinarily high).
I don't understand why many people think mortgage interest deduction is valuable. This deduction is not free. You have to pay interest in the first place to get it and it doesn't count towards your principle.
Interest deduction is valuable only when you have the cash to make investments that can earn a higher return than your mortgage interest rates, which seems not your case.

Wow...Sometimes I really do love this site aside from the nasty grammar gremlins. I am not the op, but you are so right about the deduction. This makes me want to do a spreadsheet

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, I've said this before, but you've ignored it. After your last post I feel compelled to repeat myself. You are in your early fifties and have $240k saved for retirement, with no home equity, and a spouse who has a spending problem and enjoys the finer things. You apparently have little to nothing saved already for college, despite the fact that you have 4 kids, some of whom are getting close to college age.

Regardless of what you decide to do with the house, you need to abandon the notion that you are paying for college. You absolutely cannot afford it. I realize it will be hard to tell your kids, and you'll feel like you're letting them down. But there's enough time for them to apply for merit scholarships or take out loans, and you can help them with incidentals. But the idea that you are in financial position to pay for college tuition (never mind multiple tuitions!) is a fantasy. No fancy graph or chart will change that.

If we don't pay for private school ($4200) and we rent for $3000 (instead of $7000 mortgage) that gives us $8200 we didn't have, which is $98,000. Couldn't we save $60,000 for retirement and spend $40,000 on college? (May need a little less or a little more depending on choice of college). Planning on kid one working/doing a paid coop and kid 2 getting merit aid.

Yes.. And I'm not PP....but honestly I think your retirement needs to become a major priority ASAP. I'd have them take loans and if in 4 years your assets are doing well offer to pay off a portion or all. For the sake of making it up, let's say you can turn that $400k into $700k in the next 5 years, wouldn't you be better off with that than a paid off college bill, particularly given your ages? Put differently if one of you loses a job in 5 years, you can't borrow back against the college you've already paid off. Right now you need to take a massive leap into the "holy shit I'm retiring in ten years and have nothing" pool.

- graph guy

+1

Holy crap, OP, do not even think about paying for your kids' college educations, or any more private school, for that matter.

Studies show kids that pay for their own college do better. I had my first year paid for and fucked it up. My grandparents were like hell no! So I somehow made a way for the last three years. Since I graduated they paid off some of the loans, but I still owe $7K (15 years later - LOL).

[Anonymous]

why would you send kids to private school if you are in the BCC district?

[Anonymous]

No one really retires anymore

[Anonymous]

No one really retires anymore

[Anonymous]

But surely, a $1.25 mil house will be worth a lot more by the time you are ready to retire, then you will most likely not even have a mortgage.
Then you can rent it out and live on the rent, or go for a reverse mortgage
or sell it and get a small place and invest the rest then

[Anonymous]

You can rent out the basement to pay for college