Accountant? Financial Planner? What do I need?

[Anonymous]

DH has just gotten a job with a significant pay increase, plus deferred annuity plus car allowance. It will bring our HHI to about $330K. We have three kids, one off to college next year and two more to go. We've always maxed out on our retirement accounts, and DH has a pension tpp, so I've always felt we were over saving on retirement, at the expense of college savings. We have a lot in retirement accounts, 50% equity in our DC home. We are worried now about additional taxes (previous HHI was about $200k) and we're not sure who we need to talk to about planning better for the tax hit. We have an accountant who has done our taxes a couple of times, but not thrilled with him as he's not real responsive. We have a financial planner through our bank who we do like, but I don't think he's getting all the moving pieces here with college looming on the horizon. Do we tap our equity to help pay for DC private college? Our HELOC rate is far better than private college loans, and we only qualified with our old HHI for a small pittance of what college is going to cost. I just want someone to look at all the financial pieces of our life and tell me what to do. I'm not sure if we need another accountant/CPA or some life financial planner who is not going to try to sell me insurance. Any ideas of where to start looking? TIA

[Anonymous]

ETA-sorry that reads like Kid #1 is going to a DC private college, it's just a private college outside of the area; and we only qualified (after filling out the FAFSA) for a tiny fraction of subsidized loans, which I expected. Kid 1 did get a nice scholarship at the private college, which brought it into the realm of a public university's out of state costs, so we decided to forego the DC TAG. After what we have already saved, we'll still need to come up with probably about $20k each year.

[Anonymous]

I think a fee-based certified financial planner is the way to go. Those guys at the banks work on commission usually. You want unbiased advice. These CFPs can help you with education planning, tax planning, investing, etc.

[Anonymous]

www.napfa.org

[Anonymous]

It sounds like you need to talk to a fee-based certified financial planner. They'll look at all the different facets of your income, expenses, financial concerns, and future financial goals. They'll let you know what's reasonable and help you plan how to get where you need and want to be.

[Anonymous]

With that increase, can't you just pay as you go each semester? Seems like you would be able to do that easily if your other expenses are still in line with your 200k income.

[Anonymous]

Anonymous wrote:With that increase, can't you just pay as you go each semester? Seems like you would be able to do that easily if your other expenses are still in line with your 200k income.

This. It's an extra $130k/year. Even after taxes, that should be enough to cash flow college, yes? I assume you're not planning huge lifestyle changes.

[Anonymous]

Yes we could just pay every month on college, but wondered if there might be some tax benefit by using HELOC and paying that every month. I guess I'm just feeling overwhelmed and appreciate the advice to get a fee based financial planner. We're not anticipating any real lifestyle changes, so hopefully we can save more with the salary increase for the other two kids coming up on college age.

What's kind of depressing is that even with saving for college and retirement all these years with a decent HHI, I am worried that it won't be enough.We live in DC and were kind of counting on DCTAG to help if our child decided on a public university, but it's been a real eye opener to see how much Out of State tuition is for public universities. It's basically in the ballpark now of private colleges, so the sticker shock is major. That's a rant for another board though I guess. Thanks so much for everyone's thoughtful responses.

[Anonymous]

If you are focused on tax strategies I'd talk to an accountant. For investment strategies a financial planner.

I'd pay the college tuition out of pocket. $20k should be plenty manageable with increased income. You can continue to contribute to 529s for local income tax savings. I do that for my currently in college DC. Not sure how a HELOC could possibly help. I suppose you could deduct the interest but why pay the interest to begin with if you don't have to.

OOS college tuition varies dramatically depending on the school. The best public colleges are only about $10k less than the top private colleges and don't do much aid for OOS. But there are plenty of less expensive options. There are lists out there sorted by price. Some posted it in the college forum recently.