Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
When people ask about saving for their kids college my stanadard route is this
1. Do you know how much income you will need in retirement?
2. Do you have a plan in place to reach #1?
3. Is #2 realistic and are you on track to accomplish the goal?
If you can answer yes to all 3 then you can move on to figuring out saving for your kids, it's extremely rare though that is actually the case
there are loads of ways kids can finance college . there isn't one loan you can take for an underfunded retirement . if you have a home you can borrow against the equity or reverse mortgage it like any loan you qualify for .
[quote=ncole1;47001517]1. I'm not talking about not contributing up to the match, I am talking about not maxing it out. I'm also not talking about long-term taxable vs. retirement.
2. There is ZERO gap between what you need and what is legally allowed? Really? I guess everyone who doesn't have access to a 401k is going to be eating dog food in their elder years?[/quote]
No, those who have state pensions at 70% of their final year wages + healthcare are going to be eating ok. The 401ks will be eating dog food. Those who didn't max out their 401ks and do not have a state pension are going to be eating pine nuts and twigs.
We saved enough in our kids' 529 plans to fund 2 years of post-secondary schooling should they decide to go. At that point I began increasing my 401K (with plans to be at the 15% max in a couple years), and my husband has been increasing his 1% every year for the past few years as well (and will continue until he reaches 15% max).
The kids can apply for grants/scholarships to make those 529s go further, and can also attend a local in-state public school to reduce the annual costs as well. I've told them that if they can graduate debt-free, they'll be the better off for it.
If neither decides to go to college, I'll sign the money over to myself and will go back to school to get my master's.
But my 401K, combined with pensions and SS, should be sufficient to allow me to retire on time (at age 67) and have a decent life without becoming a burden to my children.
1. I'm not talking about not contributing up to the match, I am talking about not maxing it out. I'm also not talking about long-term taxable vs. retirement.
2. There is ZERO gap between what you need and what is legally allowed? Really? I guess everyone who doesn't have access to a 401k is going to be eating dog food in their elder years?[/quote]
No, those who have state pensions at 70% of their final year wages + healthcare are going to be eating ok. The 401ks will be eating dog food. Those who didn't max out their 401ks and do not have a state pension are going to be eating pine nuts and twigs.
If you're in a blue state, it's better to be poor and old instead of middle class and old. The safety net can equal 15k or more.
I want to squirrel it away now because it's easier to back off the throttle later in life, vs have a panic moment when I discover I'm way behind at age 55 and nobody will hire me at a high salary level.
I think when doing the calculations, I saw that time had a bigger impact over the level of funding in general. The longer you give that dollar time to grow netted a larger return, than heavy contribution later in life. For that reason alone I'd rather put as much as I can in as soon as I can.
i don't want a 'lavish' retirement either. But when I look at what I want in retirement, assume social security won't be around, and when I want to retire ('early' meaning I won't have access to employer matches etc. all the way until my government-defined retirement age) it just makes sense for me to max what I can now (401k and Roth IRA). I'm fortunate that it doesn't really cut into my lifestyle.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
