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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75796  
Subject: Re: retirement for my 2 and 4 yo?? Date: 6/30/2007 7:42 PM
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I am not sure where you are getting your number of $40-$50K/year...maybe private schools and/or out of state tuition...but what we have in place projects to cover each child for in-state tuition, room and board for 4 years...beyond that and they will be funding themselves though work or grants-NO LOANS!



I did say that I was looking at colleges with the twins now, and they are both looking at private schools. DD has schools like Villanova, Babson, Bentley, Holy Cross, Providence College and Stonehill on her list. DS has his heart set on Johnson & Wales for their culinary program, but a good alternative for him for a general school is Landmark College which is a special education college, and makes most of the other schools look cheap.

The agreement we have had with our children from the beginning was that we would pay for a full four years of college at the college of their choice. Their job is to get the grades to get in, and to be able to stay in and graduate. I have never put any limits on where they can look, whether that is financial or geographic. I want them both to choose the best school for each of them, and I don't want that to just be the cheapest school we can afford.

I quoted you good numbers as this is what these schools are going for today, so in 2 years when my kids enter, it will be a bit higher, but nothing like what I'd expect you to see for tuition in 14 to 16 years when your kids start.

We have prioritized the kids' college at the top of our list with our retirement savings just after that as we are willing to work a few extra years if necessary to be able to fund their college. Our philosophy on education is that that is the one thing we can provide to our children that they will always have, no matter what. We could leave the a bazillion dollars as an inheritance, and they could go through that via spending, divorce, lawsuit, etc., but their education will always be theirs, and will provide them with more choices and a way to always provide for themselves throughout their life.

Limiting their choices to just a state school because it is less expensive does not fit with our philosophy. As we are on track to retire in 6-8 years when we're around 55-57 years old and which is when the kids will graduate or within 2 years after that, it seems that we are able to reach all our goals.

I did not realize that you had put those limitations on your kids, so I wasn't thinking along the same lines. I would caution, however, that your children may still choose to go to a more expensive college and take loans out for that, so you shouldn't assume that won't happen. At that point, you won't be able to tell them they can't go to school or have to take longer to have the cash available first, but you can try to guide them from now so they have the right expectations and the same philosophy as you.

I find it odd, however, that you put such limits on their education, but want to fund their retirement. In my mind, once I've given them the tools to make their own way in life by providing their education, it will be up to them to fund their own retirement. In reality, they've already started and have put all their earnings into Roth IRAs since they started working when they were around 11 or 12. Perhaps you should consider encouraging your children to do the same so that they would have an earlier start on retirement savings as well as have money for college expenses if they think they want to go to a school other than one that falls within the budget you have set.
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