Trading Retirement Contributions for Private School Tuition

[Anonymous]

Another vote for moving.

[Anonymous]

Well, if you have $1M in retirement already and let it grow for the next 20 years +, you'll probably have $4-$5M even if not contributing a penny more. I wouldn't panic. If you really want private, you could probably make it work.

[Anonymous]

My DC neighbor is a financial planner and told us that every one of his clients who chose private school over retirement savings regrets it when it comes time to retire.

[Anonymous]

If you don't make enough to pay for private plus save for retirement, how will you save for college?

[Anonymous]

Don't do this. Move to a better school district, get the tax benefit of the higher mortgage, and pay for tutors and enrichment as needed. You're going to put your kids in the position of being the "poor" ones at school, and then make that a reality when they have to take out huge loans for college and support their parents in retirement.

[Anonymous]

Anonymous wrote:Don't do this. Move to a better school district, get the tax benefit of the higher mortgage, and pay for tutors and enrichment as needed. You're going to put your kids in the position of being the "poor" ones at school, and then make that a reality when they have to take out huge loans for college and support their parents in retirement.

This is your answer.

[Anonymous]

I think you're in a position where you make just enough to qualify for only a minimal amount of financial aid, and yet not enough to pay tuition (even if you paused your retirement savings).

DH and I have an HHI of $335,000 (with both of us working full-time).

We pay tuition, and it's $3000 to $4000 per month PER CHILD. We literally spend $7400 per month on tuition for two kids (grades 6 and 8). After doing this for many years, we are really wishing we had just waited until middle school to go private. We definitely know people who found that, after years of paying tuition for elementary school, they needed to take a break from tuition and go to the neighborhood public school. (Granted, these tuition costs are for 9 out of 12 months of the year, but we budget the other months for summer experiences/camps.)

At least if you look at our house/cars/vacations, it seems like we have a lower income/net worth than most of my kids' peers in their private schools. (Like you, we are mid-40's and have $1 million saved for retirement, although our kids are older.) Most of the people we know through the parent community seem to make a bit more -- they have at least slightly better houses/cars/vacations. And approximately 25% of the kids at the top schools receive financial aid, and that tends to go to people with genuine financial need.

My kids don't seem to feel "poor," but I do get the impression that most full-pay families have a bit more income or net worth than we do.

We love our kids' schools, but trust me, it takes a lot to cover the tuition.

I don't think you can swing it on your HHI even if you paused your retirement, and I suspect the financial aid would only be partial if at all. (And your kids are very young. If I were in your shoes, I'd consider moving to MoCo or Fairfax, or waiting until the kids are in middle or high school to contemplate private school tuition.) Also, it's tricky to save for college while also paying tuition. One last thought -- getting higher paying jobs.

[Anonymous]

Anonymous wrote:I think you're in a position where you make just enough to qualify for only a minimal amount of financial aid, and yet not enough to pay tuition (even if you paused your retirement savings).

DH and I have an HHI of $335,000 (with both of us working full-time).

We pay tuition, and it's $3000 to $4000 per month PER CHILD. We literally spend $7400 per month on tuition for two kids (grades 6 and 8). After doing this for many years, we are really wishing we had just waited until middle school to go private. We definitely know people who found that, after years of paying tuition for elementary school, they needed to take a break from tuition and go to the neighborhood public school. (Granted, these tuition costs are for 9 out of 12 months of the year, but we budget the other months for summer experiences/camps.)

At least if you look at our house/cars/vacations, it seems like we have a lower income/net worth than most of my kids' peers in their private schools. (Like you, we are mid-40's and have $1 million saved for retirement, although our kids are older.) Most of the people we know through the parent community seem to make a bit more -- they have at least slightly better houses/cars/vacations. And approximately 25% of the kids at the top schools receive financial aid, and that tends to go to people with genuine financial need.

My kids don't seem to feel "poor," but I do get the impression that most full-pay families have a bit more income or net worth than we do.

We love our kids' schools, but trust me, it takes a lot to cover the tuition.

I don't think you can swing it on your HHI even if you paused your retirement, and I suspect the financial aid would only be partial if at all. (And your kids are very young. If I were in your shoes, I'd consider moving to MoCo or Fairfax, or waiting until the kids are in middle or high school to contemplate private school tuition.) Also, it's tricky to save for college while also paying tuition. One last thought -- getting higher paying jobs.

Thank you, these are all very good points.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Don't do this. Move to a better school district, get the tax benefit of the higher mortgage, and pay for tutors and enrichment as needed. You're going to put your kids in the position of being the "poor" ones at school, and then make that a reality when they have to take out huge loans for college and support their parents in retirement.

This is your answer.

++1
Public school is great for life preparation, and you can supplement at your own discretion. Your retirement and kids college are much more critical.

PS, in the thread mentioned earlier, many of the adults who went private lamented the money stress at home and would have preferred to have awesome vacations instead. About 2/3 didn't even feel that private school helped in their career and social lives any more than public would.

[Anonymous]

Even if tuition and donations were $15,000/year per child and the return you would expect if you invest the money instead were say four percent you would still have about $500,000 less in savings after your youngest graduates from high school.

[Anonymous]

"Completely over DCPS..."? What happened? Don't do anything on a whim. They are so young. There is no need to pay so much for private to teach your kindergartner ABCs.
You clearly care about their education a lot. I do trust you care about their education more than your house, so why not move.
I love our DCPS and I'm pretty convinced they get a good education there. I compare it to the ones kids back at home in Europe receive and it's comparable.
How you calculated how much it's going to cost you vs moving to private in middle or high school?

[Anonymous]

Anonymous wrote:I am completely over DC public schools and plan to enroll my son and daughter in private schools. We are in that odd space where we earn too much to be poor but not enough to be wealthy ($240k HHI with family of 4) so we are not counting on financial aid though we will apply. The only way we can swing tuition is to stop contributing to our retirement accounts beyond the match. Are we foolish? We are mid 40s with $1 million in retirement accounts (401k, 403b, and IRAs). Our children will be in K and 3rd grades. Please provide insights if you have made a similar decision and have regretted it or stand by your decision. TIA.

You should apply for financial aid. You may be surprised. For two kids in private school, you will likely get some financial aid and more than you anticipate. Don't stop contributing to your retirement because you cannot borrow for retirement and will not be able to make up for the lost ground. On the other hand, your kids can borrow for their college education and make up for it in later years.

[Anonymous]

Compromise by waiting 5 years to start private

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am completely over DC public schools and plan to enroll my son and daughter in private schools. We are in that odd space where we earn too much to be poor but not enough to be wealthy ($240k HHI with family of 4) so we are not counting on financial aid though we will apply. The only way we can swing tuition is to stop contributing to our retirement accounts beyond the match. Are we foolish? We are mid 40s with $1 million in retirement accounts (401k, 403b, and IRAs). Our children will be in K and 3rd grades. Please provide insights if you have made a similar decision and have regretted it or stand by your decision. TIA.

You should apply for financial aid. You may be surprised. For two kids in private school, you will likely get some financial aid and more than you anticipate. Don't stop contributing to your retirement because you cannot borrow for retirement and will not be able to make up for the lost ground. On the other hand, your kids can borrow for their college education and make up for it in later years.

Great. Another family asking for financial aid, which is paid for out of the pockets of the parents who pay full-freight tuition.

[Anonymous]

Thank you for all of the advice. We do not value our home more than our kids' education so are considering moving. We have 100k in 529 accounts. I checked out the private school thread as well and it was very informative. We reviewed our finance and had an honest talk and realize private school is just not feasible right now. We can continue to supplement academically, but my concerns are about the social and behavioral influence on our children. They are picking up habits and speech patterns we would rather not see. How do I put a price on that?