Retirement vs college savings

[Anonymous]

I am also a single parent only saving for retirement and not college. I plan to help my kids pay off their college loans monthly afterwards. Its the best I can do.

[Anonymous]

Retirement savings should be mandatory, not college

[Anonymous]

Anonymous wrote:Your kid is going to college in like 8 years, so having $0 isn't great.

Your retirement savings aren't great either, but if you stay the course for ~20 years plugging 15k per year plus your match, plus your pension, plus SS, you will have enough by retirement age.

I'd start trying to push every available cent into college savings if I were you. I'd even consider dropping your retirement savings to 5% (plus 5% match is still $10k total per year) for the next 8 years and put that into college savings.

This is terrible advice. Do not do this.

[Anonymous]

Anonymous wrote:Retirement savings should be mandatory, not college

Why can't the snowflakes join the military?

I know several people (engineers, docs, lawyers) who paid for college with the GI Bill.

You aren't doing your kids any favors by giving them a free ride.

[Anonymous]

If I put money into retirement accounts, is there anything stopping me from pulling some money out for college if it becomes necessary. Likewise, is there any reason I can't use my income flow later in life to help my child pay off his student loans. That way, he has skin in the game, but I'll most likely be in a position to be helpful.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Retirement savings should be mandatory, not college

Why can't the snowflakes join the military?

I know several people (engineers, docs, lawyers) who paid for college with the GI Bill.

You aren't doing your kids any favors by giving them a free ride.

PP here

Oh trust me I agree 100% with you

[Anonymous]

Anonymous wrote:If I put money into retirement accounts, is there anything stopping me from pulling some money out for college if it becomes necessary. Likewise, is there any reason I can't use my income flow later in life to help my child pay off his student loans. That way, he has skin in the game, but I'll most likely be in a position to be helpful.

This is our approach, though we are saving some.

[Anonymous]

43 and 44 year old parents with an 8th grader and a 10th grader. We got killed with a job loss during the recession and by needing to move during the housing bust, and basically had to start over So, we have only been saving for college for 2-3 years.

325k HHI

DH has 300k in 401k
I have 90k in Thrift, plus a federal pension with 10 years in. It looks like I will retire at drawing 30% of my salary— so the equivalent of 50k a year.

We are not maxing out pensions— DH is putting in about 1k a month plus getting the full match. I am putting in about $700 a month plus getting the full match.

We are buying both kids 8 semesters of pre-paid VA 529– which is $2600/month (ouch)—$1400 for older kid and $1200 for younger kid, because we started really late. Also, we are trying to save one year of room and board per kid in an 529 Invest account, by away stashing $100 here and there, and a lump sum each year when DH gets his bonus.

It should work out that instate tuition is fully saved for both kids and we will pay room and board out of pocket. They will overlap for two years in college, so we will use the Invest account for one year for each kid, so we aren’t stuck with paying room and board for 2 for at the same time.

In 4 1/2 years, we should be done with the prepaid 529 for youngest DC, and be able to use that money to max out the 401ks.

If they want to go OOS or private, they need to make the difference, or close, in merit aid. Older DC is at TJ, so it could happen. I am strongly opposed to loans for undergrad, because I think these kids could end up in grad school. I went to law school, and have seen how student loan debt can dictate where you work, if you get married, if you have kids, if you buy a house, etc.

The one thing we have working for us is that we are on the young side, and will not be dealing with trying to retire while our kids are in college.

[Anonymous]

We max out our 401k and Roth IRA accounts. Not much left for college savings after that, but I prioritized the flexibilty of the Roth over a 529. We only have one—here’s hoping for scholarships! Otherwise we’ll downsize if we really need $$$ help him out. Expect him to pay for some.

[Anonymous]

We live in DC and max our 401k retirement accounts and contribute the $8k total (2-parent household) to 529 every year. Then if there is additional wiggle room before taxes we contribute to IRAs. We have 2 children ages 5 and 2 and HHI $180k. Are we doing this right?

[Anonymous]

Anonymous wrote:We live in DC and max our 401k retirement accounts and contribute the $8k total (2-parent household) to 529 every year. Then if there is additional wiggle room before taxes we contribute to IRAs. We have 2 children ages 5 and 2 and HHI $180k. Are we doing this right?

No, with your income you should contribute more than $8k to the 629.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We live in DC and max our 401k retirement accounts and contribute the $8k total (2-parent household) to 529 every year. Then if there is additional wiggle room before taxes we contribute to IRAs. We have 2 children ages 5 and 2 and HHI $180k. Are we doing this right?

No, with your income you should contribute more than $8k to the 629.

How much should we co tribute?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We live in DC and max our 401k retirement accounts and contribute the $8k total (2-parent household) to 529 every year. Then if there is additional wiggle room before taxes we contribute to IRAs. We have 2 children ages 5 and 2 and HHI $180k. Are we doing this right?

No, with your income you should contribute more than $8k to the 629.

You can contribute $100 more with a 629.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your kid is going to college in like 8 years, so having $0 isn't great.

Your retirement savings aren't great either, but if you stay the course for ~20 years plugging 15k per year plus your match, plus your pension, plus SS, you will have enough by retirement age.

I'd start trying to push every available cent into college savings if I were you. I'd even consider dropping your retirement savings to 5% (plus 5% match is still $10k total per year) for the next 8 years and put that into college savings.

No no no no no no no. This is TERRIBLE advice. Do not EVER stop your retirement savings to pay for college. Your kids can take out loans, attend CC, work, etc. for college. You cannot take out loans for retirement.

I stand by the advice. I didn't say anything about "stopping" retirement savings. I said to drop it temporarily to 5% for the next 8 years. With the match, that's still $10k per year towards retirement, plus OP has a pension as a fed. $10k per year should get her $1M by retirement age, plus she'd have a pension paying something like $50k, plus SS, her retirement will be fine. Plus, she'll likely be able to increase from the $10k after the kid goes to college, and as she gets raises. Meanwhile, she has $0 ready for her kid who is going to college in 8 years. Gulp.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We live in DC and max our 401k retirement accounts and contribute the $8k total (2-parent household) to 529 every year. Then if there is additional wiggle room before taxes we contribute to IRAs. We have 2 children ages 5 and 2 and HHI $180k. Are we doing this right?

No, with your income you should contribute more than $8k to the 629.

They're already contributing 5% of their GROSS income to college savings. They live in DC and make $180k. How much more disposable cash do you assume they have?