FAFSA - is middle-class waste time applying?

[Anonymous]

I honestly am a little confused how people have managed to save up enough for 4 years of 80k/year/kid. We've been pretty consistent and diligent in prioritizing college savings since kids were born. 10k/year for one over 13 years in one 529 still only brought us to ~200K. And a lot of that is with the current run-up in stocks. We'll probably be fine since we have some more time to go. But it's not that easy if you don't know what you are doing, investing in target date funds or just have a lousy 529 plan (e.g. DC).

[Anonymous]

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Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

NP: I personally wouldn't pay $80K for college--don't think it is worth it for 99% of colleges; however, your analysis leaves out any savings (for emergencies, etc.) and a 529 or investments/assets that could be used to pay for college. Your assumption is that the family is cashflowing the entire cost per year. I also wouldn't max out 401k for 4-5 years while 1-2 kids are in college if your 401k is already at a healthy amount.

Yes, I made the assumption that the PP stated they could pay for private college with $300HHI because they didn't state that.

If our 529 had $250K+, sure, but I don't think the PP has that much in their 529.

Like I said, we have enough for in state in our 529, but at $80/year with two kids, we'd still have to cash flow at least $300K.

And I disagree about not maxing out retirement. What is a "healthy" amount in retirement ? We aren't feds, so we have to pay for our own health insurance. I'm not planning to work until I'm 65.

You can always borrow to pay for college; can't do that for retirement.

Again, you are making life choices.. if you will not work until 65, which is what you project you'll need to, you need to change your lifestyle or accept your kids cannot go to any school you/they want.

well, duh, of course it's about life choices, but the PP thought $300K was plenty to pay for $80k/year private. My point is that it's really not unless you ONLY save for college, have one child, and don't want to go on vacations (and I'm not even talking about luxury vacations), or buy a new car, or have reasonable emergency savings, or live in a good school cluster (public not private).

We don't drive expensive cars, I drive a subaru. My spouse is from the UK, and we go see their family every couple of years. My family lives out west, so we go see them the other years. Family of four. Do you know how expensive that gets. I suppose I could prioritize college savings, and not see our elderly parents biannually.

yes, it's all about life choices. My kids have learned that. My DC now in college has learned that going to an expensive school outside of T10 is not a good deal. That spending $300K+ for four years just so you like the feel of the campus for 4 years is shortsighted. If you take out loans for those expensive four years, you'll be paying off that loan for the next 20 years.

But, those are our opinions and our choices.

It is about life choices. A Subaru is a more expensive car. And, on $300K, where is all your money going? We could comfortably pay for a private and many other things on $300K.

My subaru was $30k. My old one was 14 years old and died, so that's why I had to get a new one. The average cost of a car today is $45K.

Where does $300K go? Do you think we don't pay taxes? The HHI is gross, not net. We are also self employed, so we pay an extra 12% for self employment income. And since we are self employed, we don't have employer's contributing to our 401k. We have been having to contribute both the employer and employee portion. I'm not complaining about that. We are able to save a good amount that way. But, that extra is several thousands of dollars.

Do you think we all have great fed insurance? We buy our own, with a high deductible plan. We have no family money so we save a lot for retirement. We live in a good school cluster. Our parents live really far from us, so it costs a lot to visit them.

I just got our property tax assessment in the mail. It went up by 25%. Home insurance is up by 40%. We are in our 50s so we have even more health issues now, and as we get older, health insurance gets even more expensive.

Are you a fed? I feel like you feds live in a bubble.

I'm not complaining about my life. We have a great life. We have enough saved for in state tuition. My kid got merit aid, too.

Point being: $300K seems like a lot, and it is, but it's still not that easy to pay for $80k/year per child for college and live a good but not luxury lifestyle. And yea, I'm not willing to sacrifice vacation or a $30K car, which my kid will be getting when they graduate, to pay for $80k/year per child for college.

Life choices.

Oh, good grief. We are pretty much all the things you are (in 50s, crazy high property tax area, w/ family in Europe, had to buy a car) on half your salary. We've been saving since our kids were little and could pay 50-55k/year with some loans. I don't understand how you say you can't afford full fare. Fine if you don't want to, and it may not be easy, but you could do it with planning/saving. As I said earlier, the real problem is that people aren't convinced to save early enough.

Instead of criticizing, please share specifics on how you saved up enough for $55k per year per kid on a $150 HHI. That is a pretty significant achievement.

Not that poster but we've done it too. It's all about lifestyle choices. Your home, your cars, your clothing, your food, your activities (though this is our biggest expense as ours are in pricy activities). We live in our "starter" home. We aren't vacationing regularly. We are shopping at lower cost food and other stores. Our kids aren't getting designer anything, nor are we except on clearance or a good. We started at birth. There were so many things we needed with our house and other things, but we learned to DIY many things and we put a huge focus to the college savings. So, the poster saying they need their vacations, to us that is a want, and we aren't taking one or a very cheap one or every few years and that money goes into the college fund. Need a new kitchen, DIY almost everything... same with most other things except big things like the roof or siding. So, the $5K you are paying someone to paint your house, we are doing it ourselves and that money goes into the college fund.

I am the poster the PP was responding and forgot about diy. Thanks for including that. We do basic plumbing and electrical, all landscaping, painting, etc ourselves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Oh gosh, I am so sick of people making hundreds of thousands of dollars and trying to call themselves "middle class." We earn about $150K a year (here in the DC area as well) and I hesitate to call us middle class-- I think we're upper middle class, not quite rich yet but getting there. At $300,000 you are absolutely not middle class anymore- you're in like the top 5% richest households in the area.

Look, I get that paying for college is not easy even at $300K, but haven't you been saving? Even if you only saved like $10K per child per year (which shouldn't be too hard at your income-- we manage it pretty easily at half your income) that should cover most or all of the costs, depending on investment returns.

.

Oh gosh, I am so sick of people making assumptions about what others can afford. We make $350+. We’ve never had any family help. We lived on one GS-11 to gradually 14 in the DMV when our kids were little and could hardly pay the mortgage, much less save for college. One of our kids has a disability that requires expenses beyond medical that you’d never begin to understand.

We have high incomes in the last few years and our expenses are high. We still have our own student loans. College for a kid with our kids disability (if that happens) is DOUBLE private college and they will need help their entire life.

So I’m so sick of people jumping in on DCUM and saying off of one sentence about income “of course you can afford it, you made lifestyle choices or didn’t save enough.”

You just don’t know the complexities of someone else’s situation.

We will not get aid and our DC will go to a great state school with merit. We are okay with that. But don’t tell me what I can afford based on my income when I’m in my 50’s and my kid is 18.

Not sure why you are coming out swinging. Clearly those of us at 150k or thereabouts are addressing people with typical needs at 300k who complain they can't afgord it when they could have had they prioritized. No one is claiming anything about a family that has lifetime special needs expenses.

[Anonymous]

Anonymous wrote:I honestly am a little confused how people have managed to save up enough for 4 years of 80k/year/kid. We've been pretty consistent and diligent in prioritizing college savings since kids were born. 10k/year for one over 13 years in one 529 still only brought us to ~200K. And a lot of that is with the current run-up in stocks. We'll probably be fine since we have some more time to go. But it's not that easy if you don't know what you are doing, investing in target date funds or just have a lousy 529 plan (e.g. DC).

You pay some out of current income, some out of savings.

[Anonymous]

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Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

NP: I personally wouldn't pay $80K for college--don't think it is worth it for 99% of colleges; however, your analysis leaves out any savings (for emergencies, etc.) and a 529 or investments/assets that could be used to pay for college. Your assumption is that the family is cashflowing the entire cost per year. I also wouldn't max out 401k for 4-5 years while 1-2 kids are in college if your 401k is already at a healthy amount.

Yes, I made the assumption that the PP stated they could pay for private college with $300HHI because they didn't state that.

If our 529 had $250K+, sure, but I don't think the PP has that much in their 529.

Like I said, we have enough for in state in our 529, but at $80/year with two kids, we'd still have to cash flow at least $300K.

And I disagree about not maxing out retirement. What is a "healthy" amount in retirement ? We aren't feds, so we have to pay for our own health insurance. I'm not planning to work until I'm 65.

You can always borrow to pay for college; can't do that for retirement.

Again, you are making life choices.. if you will not work until 65, which is what you project you'll need to, you need to change your lifestyle or accept your kids cannot go to any school you/they want.

well, duh, of course it's about life choices, but the PP thought $300K was plenty to pay for $80k/year private. My point is that it's really not unless you ONLY save for college, have one child, and don't want to go on vacations (and I'm not even talking about luxury vacations), or buy a new car, or have reasonable emergency savings, or live in a good school cluster (public not private).

We don't drive expensive cars, I drive a subaru. My spouse is from the UK, and we go see their family every couple of years. My family lives out west, so we go see them the other years. Family of four. Do you know how expensive that gets. I suppose I could prioritize college savings, and not see our elderly parents biannually.

yes, it's all about life choices. My kids have learned that. My DC now in college has learned that going to an expensive school outside of T10 is not a good deal. That spending $300K+ for four years just so you like the feel of the campus for 4 years is shortsighted. If you take out loans for those expensive four years, you'll be paying off that loan for the next 20 years.

But, those are our opinions and our choices.

It is about life choices. A Subaru is a more expensive car. And, on $300K, where is all your money going? We could comfortably pay for a private and many other things on $300K.

My subaru was $30k. My old one was 14 years old and died, so that's why I had to get a new one. The average cost of a car today is $45K.

Where does $300K go? Do you think we don't pay taxes? The HHI is gross, not net. We are also self employed, so we pay an extra 12% for self employment income. And since we are self employed, we don't have employer's contributing to our 401k. We have been having to contribute both the employer and employee portion. I'm not complaining about that. We are able to save a good amount that way. But, that extra is several thousands of dollars.

Do you think we all have great fed insurance? We buy our own, with a high deductible plan. We have no family money so we save a lot for retirement. We live in a good school cluster. Our parents live really far from us, so it costs a lot to visit them.

I just got our property tax assessment in the mail. It went up by 25%. Home insurance is up by 40%. We are in our 50s so we have even more health issues now, and as we get older, health insurance gets even more expensive.

Are you a fed? I feel like you feds live in a bubble.

I'm not complaining about my life. We have a great life. We have enough saved for in state tuition. My kid got merit aid, too.

Point being: $300K seems like a lot, and it is, but it's still not that easy to pay for $80k/year per child for college and live a good but not luxury lifestyle. And yea, I'm not willing to sacrifice vacation or a $30K car, which my kid will be getting when they graduate, to pay for $80k/year per child for college.

Life choices.

Oh, good grief. We are pretty much all the things you are (in 50s, crazy high property tax area, w/ family in Europe, had to buy a car) on half your salary. We've been saving since our kids were little and could pay 50-55k/year with some loans. I don't understand how you say you can't afford full fare. Fine if you don't want to, and it may not be easy, but you could do it with planning/saving. As I said earlier, the real problem is that people aren't convinced to save early enough.

Instead of criticizing, please share specifics on how you saved up enough for $55k per year per kid on a $150 HHI. That is a pretty significant achievement.

Not that poster but we've done it too. It's all about lifestyle choices. Your home, your cars, your clothing, your food, your activities (though this is our biggest expense as ours are in pricy activities). We live in our "starter" home. We aren't vacationing regularly. We are shopping at lower cost food and other stores. Our kids aren't getting designer anything, nor are we except on clearance or a good. We started at birth. There were so many things we needed with our house and other things, but we learned to DIY many things and we put a huge focus to the college savings. So, the poster saying they need their vacations, to us that is a want, and we aren't taking one or a very cheap one or every few years and that money goes into the college fund. Need a new kitchen, DIY almost everything... same with most other things except big things like the roof or siding. So, the $5K you are paying someone to paint your house, we are doing it ourselves and that money goes into the college fund.

I am the poster the PP was responding and forgot about diy. Thanks for including that. We do basic plumbing and electrical, all landscaping, painting, etc ourselves.

No housekeepers, no babysitters, none of that too (and no family to help before people claim that).

[Anonymous]

Anonymous wrote:I honestly am a little confused how people have managed to save up enough for 4 years of 80k/year/kid. We've been pretty consistent and diligent in prioritizing college savings since kids were born. 10k/year for one over 13 years in one 529 still only brought us to ~200K. And a lot of that is with the current run-up in stocks. We'll probably be fine since we have some more time to go. But it's not that easy if you don't know what you are doing, investing in target date funds or just have a lousy 529 plan (e.g. DC).

I had said 50-55k per year after saving, loans and some pay-as-you-go with our HHI of 150k. Someone at 300k should be able to save enough for 80k/yr barring unique circumstances like the special needs parent.

[Anonymous]

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Anonymous wrote:Oh gosh, I am so sick of people making hundreds of thousands of dollars and trying to call themselves "middle class." We earn about $150K a year (here in the DC area as well) and I hesitate to call us middle class-- I think we're upper middle class, not quite rich yet but getting there. At $300,000 you are absolutely not middle class anymore- you're in like the top 5% richest households in the area.

Look, I get that paying for college is not easy even at $300K, but haven't you been saving? Even if you only saved like $10K per child per year (which shouldn't be too hard at your income-- we manage it pretty easily at half your income) that should cover most or all of the costs, depending on investment returns.

.

Oh gosh, I am so sick of people making assumptions about what others can afford. We make $350+. We’ve never had any family help. We lived on one GS-11 to gradually 14 in the DMV when our kids were little and could hardly pay the mortgage, much less save for college. One of our kids has a disability that requires expenses beyond medical that you’d never begin to understand.

We have high incomes in the last few years and our expenses are high. We still have our own student loans. College for a kid with our kids disability (if that happens) is DOUBLE private college and they will need help their entire life.

So I’m so sick of people jumping in on DCUM and saying off of one sentence about income “of course you can afford it, you made lifestyle choices or didn’t save enough.”

You just don’t know the complexities of someone else’s situation.

We will not get aid and our DC will go to a great state school with merit. We are okay with that. But don’t tell me what I can afford based on my income when I’m in my 50’s and my kid is 18.

Believe it or not, you aren't the only family with a special needs child, a parent with health issues, or elderly care - we had all three. Zero parent help, even though one could help. We know the expenses well. I had to quit my job between all three, as I'm a parent with health issues. And, yet, we still manage. You having student loans was 100% your choice. If you could hardly pay the mortgage, your lifestyle/housing choice was the issue. You overspent on a house. You overspent on your college. You make considerable income so you could comfortably pay things off but instead complain about it. If you cannot afford your house, sell it and pay cash for something more affordable.

Wow. Way to make my point. I’m not complaining about anything but people like you.

Why are you complaining about someone like me making it work on far far less income with similar issues?

[Anonymous]

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Anonymous wrote:Oh gosh, I am so sick of people making hundreds of thousands of dollars and trying to call themselves "middle class." We earn about $150K a year (here in the DC area as well) and I hesitate to call us middle class-- I think we're upper middle class, not quite rich yet but getting there. At $300,000 you are absolutely not middle class anymore- you're in like the top 5% richest households in the area.

Look, I get that paying for college is not easy even at $300K, but haven't you been saving? Even if you only saved like $10K per child per year (which shouldn't be too hard at your income-- we manage it pretty easily at half your income) that should cover most or all of the costs, depending on investment returns.

.

Oh gosh, I am so sick of people making assumptions about what others can afford. We make $350+. We’ve never had any family help. We lived on one GS-11 to gradually 14 in the DMV when our kids were little and could hardly pay the mortgage, much less save for college. One of our kids has a disability that requires expenses beyond medical that you’d never begin to understand.

We have high incomes in the last few years and our expenses are high. We still have our own student loans. College for a kid with our kids disability (if that happens) is DOUBLE private college and they will need help their entire life.

So I’m so sick of people jumping in on DCUM and saying off of one sentence about income “of course you can afford it, you made lifestyle choices or didn’t save enough.”

You just don’t know the complexities of someone else’s situation.

We will not get aid and our DC will go to a great state school with merit. We are okay with that. But don’t tell me what I can afford based on my income when I’m in my 50’s and my kid is 18.

Believe it or not, you aren't the only family with a special needs child, a parent with health issues, or elderly care - we had all three. Zero parent help, even though one could help. We know the expenses well. I had to quit my job between all three, as I'm a parent with health issues. And, yet, we still manage. You having student loans was 100% your choice. If you could hardly pay the mortgage, your lifestyle/housing choice was the issue. You overspent on a house. You overspent on your college. You make considerable income so you could comfortably pay things off but instead complain about it. If you cannot afford your house, sell it and pay cash for something more affordable.

You “manage” not the question is whether you can pay private college tuition full pay. That is the question, isn’t it?

Yes, we could pay for it. I'm hoping for our state school but we'll see where ours gets in and has what they want. I'd prefer a state school and fully paying for both college and graduate school.

[Anonymous]

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Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

NP: I personally wouldn't pay $80K for college--don't think it is worth it for 99% of colleges; however, your analysis leaves out any savings (for emergencies, etc.) and a 529 or investments/assets that could be used to pay for college. Your assumption is that the family is cashflowing the entire cost per year. I also wouldn't max out 401k for 4-5 years while 1-2 kids are in college if your 401k is already at a healthy amount.

Yes, I made the assumption that the PP stated they could pay for private college with $300HHI because they didn't state that.

If our 529 had $250K+, sure, but I don't think the PP has that much in their 529.

Like I said, we have enough for in state in our 529, but at $80/year with two kids, we'd still have to cash flow at least $300K.

And I disagree about not maxing out retirement. What is a "healthy" amount in retirement ? We aren't feds, so we have to pay for our own health insurance. I'm not planning to work until I'm 65.

You can always borrow to pay for college; can't do that for retirement.

Again, you are making life choices.. if you will not work until 65, which is what you project you'll need to, you need to change your lifestyle or accept your kids cannot go to any school you/they want.

well, duh, of course it's about life choices, but the PP thought $300K was plenty to pay for $80k/year private. My point is that it's really not unless you ONLY save for college, have one child, and don't want to go on vacations (and I'm not even talking about luxury vacations), or buy a new car, or have reasonable emergency savings, or live in a good school cluster (public not private).

We don't drive expensive cars, I drive a subaru. My spouse is from the UK, and we go see their family every couple of years. My family lives out west, so we go see them the other years. Family of four. Do you know how expensive that gets. I suppose I could prioritize college savings, and not see our elderly parents biannually.

yes, it's all about life choices. My kids have learned that. My DC now in college has learned that going to an expensive school outside of T10 is not a good deal. That spending $300K+ for four years just so you like the feel of the campus for 4 years is shortsighted. If you take out loans for those expensive four years, you'll be paying off that loan for the next 20 years.

But, those are our opinions and our choices.

I mean, this is demonstrably untrue? We earn more than $100K less a year than you, have two kids, have tons of emergency savings, have enough in retirement savings to retire early if we want to, and are saving enough for college to cover well over half of the price of the most expensive colleges (should be able to cashflow the rest pretty easily, especially since we'll be done paying off our 15-year mortgage by then.) Not sure why you can't do this at your much higher income. Are you one of those "only the most prestigious public schools are good enough for my kids, so clearly we must spend 7 figures on a house" kind of people? Are you way over-saving for retirement at the expense of college?

We did a 15 year refinance and paid it off quicker with recasting and it's freeing not having a mortgage. I'd love a bigger house, but I'd prefer mine has a debt free education. I don't get how those of us with less income seem to manage and those that make double cannot.

DP. I'm just glad to see a bunch of us on here. Some days this board seems so dominated by wealthy "Big 3" or W parents.

[Anonymous]

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Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

NP: I personally wouldn't pay $80K for college--don't think it is worth it for 99% of colleges; however, your analysis leaves out any savings (for emergencies, etc.) and a 529 or investments/assets that could be used to pay for college. Your assumption is that the family is cashflowing the entire cost per year. I also wouldn't max out 401k for 4-5 years while 1-2 kids are in college if your 401k is already at a healthy amount.

Yes, I made the assumption that the PP stated they could pay for private college with $300HHI because they didn't state that.

If our 529 had $250K+, sure, but I don't think the PP has that much in their 529.

Like I said, we have enough for in state in our 529, but at $80/year with two kids, we'd still have to cash flow at least $300K.

And I disagree about not maxing out retirement. What is a "healthy" amount in retirement ? We aren't feds, so we have to pay for our own health insurance. I'm not planning to work until I'm 65.

You can always borrow to pay for college; can't do that for retirement.

Again, you are making life choices.. if you will not work until 65, which is what you project you'll need to, you need to change your lifestyle or accept your kids cannot go to any school you/they want.

well, duh, of course it's about life choices, but the PP thought $300K was plenty to pay for $80k/year private. My point is that it's really not unless you ONLY save for college, have one child, and don't want to go on vacations (and I'm not even talking about luxury vacations), or buy a new car, or have reasonable emergency savings, or live in a good school cluster (public not private).

We don't drive expensive cars, I drive a subaru. My spouse is from the UK, and we go see their family every couple of years. My family lives out west, so we go see them the other years. Family of four. Do you know how expensive that gets. I suppose I could prioritize college savings, and not see our elderly parents biannually.

yes, it's all about life choices. My kids have learned that. My DC now in college has learned that going to an expensive school outside of T10 is not a good deal. That spending $300K+ for four years just so you like the feel of the campus for 4 years is shortsighted. If you take out loans for those expensive four years, you'll be paying off that loan for the next 20 years.

But, those are our opinions and our choices.

I mean, this is demonstrably untrue? We earn more than $100K less a year than you, have two kids, have tons of emergency savings, have enough in retirement savings to retire early if we want to, and are saving enough for college to cover well over half of the price of the most expensive colleges (should be able to cashflow the rest pretty easily, especially since we'll be done paying off our 15-year mortgage by then.) Not sure why you can't do this at your much higher income. Are you one of those "only the most prestigious public schools are good enough for my kids, so clearly we must spend 7 figures on a house" kind of people? Are you way over-saving for retirement at the expense of college?

We did a 15 year refinance and paid it off quicker with recasting and it's freeing not having a mortgage. I'd love a bigger house, but I'd prefer mine has a debt free education. I don't get how those of us with less income seem to manage and those that make double cannot.

DP. I'm just glad to see a bunch of us on here. Some days this board seems so dominated by wealthy "Big 3" or W parents.

Based on this thread, there seems to be a real mix between what PP is describing as a “bunch of us” and wealthy Big 3/W parents. If anything, the challenge can be the UMC parents who do not/refuse to see themselves as anything more than MC.

[Anonymous]

Anonymous wrote:I honestly am a little confused how people have managed to save up enough for 4 years of 80k/year/kid. We've been pretty consistent and diligent in prioritizing college savings since kids were born. 10k/year for one over 13 years in one 529 still only brought us to ~200K. And a lot of that is with the current run-up in stocks. We'll probably be fine since we have some more time to go. But it's not that easy if you don't know what you are doing, investing in target date funds or just have a lousy 529 plan (e.g. DC).

Bingo.

[Anonymous]

Anonymous wrote:I honestly am a little confused how people have managed to save up enough for 4 years of 80k/year/kid. We've been pretty consistent and diligent in prioritizing college savings since kids were born. 10k/year for one over 13 years in one 529 still only brought us to ~200K. And a lot of that is with the current run-up in stocks. We'll probably be fine since we have some more time to go. But it's not that easy if you don't know what you are doing, investing in target date funds or just have a lousy 529 plan (e.g. DC).

I agree. I'm a PP with a HHI of $300K. We started the 529 for our DC at age 4 after daycare/prek was done. The targeted fund grew only by like 4%, if that. I recently pulled some money out of the targeted fund and put it in an equity fund, and now it's doing so much better.

People are making some big assumptions about families with $300K, as if that's our take home pay, and we are taking luxury vacations ever year, and have a $60K car.

Oh, and DH DIYs most things at home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If my income was $300k I would have zero problems being able to pay for my kid to go to an expensive, private college. You need a dose of reality

$300k puts you in a 30% combined tax bracket if you live in MD, about 27% in VA. Don't forget, SALT deductions are limited, so you will probably take the standard deduction.

If you are 50+, you want to max out your 401k contribution and add the catch up extra $7500, which brings it to like $30K per person.

So, your income will look something like this:

1. 60K 401k (assuming both are 50+ and contributing the max, which you should at that income level)
2. taxes around $60K to $65K

That leaves you with 300K - 120k = $180k.

Let's say your annual expenses is something like $100K/yr in just expenses. You would have $80k left. But that just pays for room and board. Travel and other costs will rack up more. That's just one kid. Many of us have more than one kid who will be in college at the same time.

You will also not have any wiggle room for large emergency expenses or even vacation. If your car breaks down (like ours just did), you'd have to get a loan at 6% to 7%.

My DC is at the state flagship with some merit aid. We told this DC, who had super high stats, to not do ED at the expensive colleges. We cannot afford it, yes, even with $300K per year. It would leave us with so little wiggle room, that we'd be eating hand to mouth for the next 7 years -- we have two kids, and DH is 60. We have enough in the 529s for in state. That would barely cover 2 years of private.

I think you are the one who needs a dose of reality.

NP: I personally wouldn't pay $80K for college--don't think it is worth it for 99% of colleges; however, your analysis leaves out any savings (for emergencies, etc.) and a 529 or investments/assets that could be used to pay for college. Your assumption is that the family is cashflowing the entire cost per year. I also wouldn't max out 401k for 4-5 years while 1-2 kids are in college if your 401k is already at a healthy amount.

Yes, I made the assumption that the PP stated they could pay for private college with $300HHI because they didn't state that.

If our 529 had $250K+, sure, but I don't think the PP has that much in their 529.

Like I said, we have enough for in state in our 529, but at $80/year with two kids, we'd still have to cash flow at least $300K.

And I disagree about not maxing out retirement. What is a "healthy" amount in retirement ? We aren't feds, so we have to pay for our own health insurance. I'm not planning to work until I'm 65.

You can always borrow to pay for college; can't do that for retirement.

Again, you are making life choices.. if you will not work until 65, which is what you project you'll need to, you need to change your lifestyle or accept your kids cannot go to any school you/they want.

well, duh, of course it's about life choices, but the PP thought $300K was plenty to pay for $80k/year private. My point is that it's really not unless you ONLY save for college, have one child, and don't want to go on vacations (and I'm not even talking about luxury vacations), or buy a new car, or have reasonable emergency savings, or live in a good school cluster (public not private).

We don't drive expensive cars, I drive a subaru. My spouse is from the UK, and we go see their family every couple of years. My family lives out west, so we go see them the other years. Family of four. Do you know how expensive that gets. I suppose I could prioritize college savings, and not see our elderly parents biannually.

yes, it's all about life choices. My kids have learned that. My DC now in college has learned that going to an expensive school outside of T10 is not a good deal. That spending $300K+ for four years just so you like the feel of the campus for 4 years is shortsighted. If you take out loans for those expensive four years, you'll be paying off that loan for the next 20 years.

But, those are our opinions and our choices.

I mean, this is demonstrably untrue? We earn more than $100K less a year than you, have two kids, have tons of emergency savings, have enough in retirement savings to retire early if we want to, and are saving enough for college to cover well over half of the price of the most expensive colleges (should be able to cashflow the rest pretty easily, especially since we'll be done paying off our 15-year mortgage by then.) Not sure why you can't do this at your much higher income. Are you one of those "only the most prestigious public schools are good enough for my kids, so clearly we must spend 7 figures on a house" kind of people? Are you way over-saving for retirement at the expense of college?

Nope. We don't live in the best school cluster. It's a good school cluster, but not the best in the district. We did not pay $1mil for the house. I would never do that. One of the reasons I didn't want to live in the "best" school cluster was because I didn't want my kids around that much wealth.[twitter]

I bet you are a fed with good health insurance. Have you tried private insurance for the past 20 years with large medical bills?

Our HHI has not always been $300k, btw, but FAFSA doesn't look at what your income was 3 years ago.

And what do you mean by "oversaving for retirement at the expense of college"? We've been putting in more than $2500 per child per year most years. Our retirement savings is about $2.7 mil, but we are 55/60, and ageism has taken root.

Also, about cash flowing, there is a thread on the Jobs forum about someone being laid off just before the holidays. We have lived through layoffs and ageism. If you cash flow an expensive college, what happens if you get laid off?

Don't think your job is safe. It's not, especially as you get older.

[Anonymous]

If you are choosing a school at full price and ignoring the ones that give your kid merit aid, you are making a mistake. Don't let the ranking game make a fool of you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I honestly am a little confused how people have managed to save up enough for 4 years of 80k/year/kid. We've been pretty consistent and diligent in prioritizing college savings since kids were born. 10k/year for one over 13 years in one 529 still only brought us to ~200K. And a lot of that is with the current run-up in stocks. We'll probably be fine since we have some more time to go. But it's not that easy if you don't know what you are doing, investing in target date funds or just have a lousy 529 plan (e.g. DC).

I agree. I'm a PP with a HHI of $300K. We started the 529 for our DC at age 4 after daycare/prek was done. The targeted fund grew only by like 4%, if that. I recently pulled some money out of the targeted fund and put it in an equity fund, and now it's doing so much better.

People are making some big assumptions about families with $300K, as if that's our take home pay, and we are taking luxury vacations ever year, and have a $60K car.

Oh, and DH DIYs most things at home.

I hear you on the 529 shift. We did the same. I am one of the 150k parents and still think that if those on 300k prioritized, they could do it. We realize thst isn't your take home. 150 isn't ours. But, you make DOUBLE what we make. Even if that nets you only a third of that increase or even a quarter, it would be more than enough to pay for 2 kids' full freight college costs. You have different priorities. Maybe you eat out alot. Your cars probably do cost more than ours (20k). Maybe you pay for more services that we would consider luxury (housecleaning, hair styles, nails, landscaping, etc). Who knows. But you have money that hoes elsewhere, and that's fine. Just don't complain that you can't save enough. You can, but you may just have other priorities.