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[quote=Anonymous]I’m looking for advice from parents who are “donut hole” like I expect we’ll be. HHI is currently $170 or so, 3 kids, still have one in daycare but oldest is rising 8th grader. We don’t max out 401(k)s but should, retirement is really behind the curve, both parents early 40s. Contributing a few hundred in 529s per month, skewed toward the oldest, PITI is $3500 and we aren’t (yet) paying extra. Only purchased home two years ago, so will have mortgage during college years, which I understand FAFSA EFC won’t factor in, but CSS schools will.

I am not trying to game the system by any means, but if EFC assumes 47% of HHI to put toward child #1 college costs, we will have a huge deficit. HHI increase over the next five years will likely be modest at best (one parent Fed, capped at step 10 unless a promotion opportunity materializes, other parent in sales, sporadic and fluctuating income, but not likely to have significant boost of more than 5% annually, averaged over the next few years). Do we throw it all in college savings, forgoing increasing retirement (which at our age, scares me). Do we just drip,drip what we can in the 529, knowing we won’t even have enough to cover our in-state fully paid? DC #1 is bright, may perhaps be offered merit aid but for this discussion I am assuming none. How do you we best prepare for this? From websites I have read, the prior, and prior-prior years retirement contributions are counted as gross income, to ostensibly be used to pay for college? I just don’t understand how that can be considered, us MC folks have to save for retirement, right?

I’d love to hear from any families with similar situations, HHI, and tell me how you figured it out. If we devoted all extra available $ after just 401(k) match to 529 for DC #1 for the next 5 years, that might cover close to in-state. But kids 2 &3 would have a pittance in 529s; and retirement saving would be very, very behind. I feel as though there are no good options here, would love any insight to help figure out the next few years of savings.[/quote]

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