When Retirement and College Clash

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The dream of buying a home or giving our girls an affordable college education collided with each other last week, and college won.

To help cover the down payment and closing costs on the condo we wanted to buy, Brett and I had planned to withdraw some of our savings that’s sitting in an IRA. As we’re both over 59 1/2, there’s no penalty for withdrawal, and the way our retirement is funded we had only planned to use those savings when we had to make mandatory withdrawals at age 70 anyway.

However, any funds we withdrew would count as income for this year, and it turned out that the increase in our income brought about by withdrawing enough for a downpayment and closing costs would negatively affect us not once but three times.

First would be the tax burden based on our withdrawal. We currently have a very small tax bill as we pay no state income tax in Hawai’i on our retirement income, and very little Federal tax. That would change as we would not only be hit with higher Federal taxes based on our increased income in 2015, but would pay state tax as well on our withdrawal from the IRA (our other retirement income would still remain untaxed by Hawai’i). We were prepared for this hit.

What we were not prepared for was the dramatic effect that increase in income would have on the girls’ financial aid prospects.

The reason our retirement savings are in IRAs is that they are protected there; college financial aid formulations exclude sheltered retirement funds. Unprotected, those funds would be quickly tapped, and with three college age children Brett and I would be left with little to no savings in short order. Even if we had planned to use our savings to pay for college, with today’s costs there is no way we could cover expenses for three children over the next eight years. Plus, Rule #1 about saving for retirement is that you never jeopardize your retirement to pay for your children’s college.

Meiling was awarded a four-year scholarship to the University of Oregon that covers all her tuition and fees (she pays for room and board). If we increased our income by withdrawing from our IRA this year the bump would be enough that she would no longer qualify for any Federal financial aid meaning she would lose her scholarship, and we would either have to raid our retirement accounts even more to cover her costs or she would not be able to afford to continue at the university. The federal government could care less that this would be a one-time increase to our income, and used only for the purpose of buying a home, when calculating Meiling’s aid award, and likewise the universities financial aid office. If we took more money out of our accounts to cover her expenses next year our income would of course go up even more, and we would be setting up something of a vicious circle. And, we’re just talking about Meiling here. WenYu also heads off to college next year, and any savings we spent on Meiling would mean less or nothing for WenYu, with the increase in our income also affecting any aid she might be qualified to receive. According to federal financial aid calculators, even with two children in school, with the planned IRA withdrawals our 2015 income would still be too much for either girl to receive much, if any, Federal aid other than unsubsidized loans (NO!!), and we could forget about any need-based aid from any college. There might be merit aid, but there’s no way to count on that.

So, there were two hits we would be taking if we withdraw anything now from our IRA. However, it turned out there was still one more sting waiting in the wings.

Starting in 2016, the FAFSA will be filled out beginning October 1 using the previous year’s income (2015). No more will families have to wait until January to submit their forms and tax information and then try to figure out what kind of aid they might qualify for or whether they really can afford College X or College Y. Colleges and universities will be required to present more up-front aid information, so students and families can make better choices about where to apply and what to expect. This is an important and long-overdue change, one I am greatly in favor of. This change however means that our 2015 income will not only be used to determine aid for the 2016-2017 school year, but for the 2017-2018 year as well. Our supposed one-time income bump from the IRA withdrawal would count against us for two years, effectively cutting the girls out of any financial aid until Fall 2018.

The decision of what to do was actually easy. We cannot harm our girls’ efforts and dreams, and we cannot damage our future financial security. We cannot deny the girls the opportunities that are available for them now just because we want to buy a house or a condo. They didn’t ask for this life, but have made the most of what they have been given so far, and we cannot pull their futures out from under them.

The condo was a great buy, and would have been a perfect home for us. We have the income and resources to buy it, but tapping into those resources came with consequences. We were devastated to have to let the condo go as well as our dream of buying a home on Kaua’i, at least for the time being. We don’t know if anything else will be available and affordable again in the future. Maybe yes, but there’s also the possibility of a big NO. But, it’s a risk that we are going to have to take. Brett and I will wait until the girls are through school before we think about buying again.

In the coming days we will untangle ourselves from this latest purchase contract. We will continue to rent where we are for the time being, and after the first of they year we will begin looking for a new rental home.

It is what it is.

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56 thoughts on “When Retirement and College Clash

  1. Janette says:

    OW! A good lesson for me to hear now while helping my daughter and son to set up things. You are so smart to have looked at the tax implications before you hurt their chances. You are taking amazing care of your girls.
    Just two things to think about-
    No Roth? You do not have to declare money taken out of that
    VA loan- no need for a down- but need for closing costs. Could you take small amounts out to cover the increase in mortgage and still keep the kids in a good tax zone?
    I have spent the last three years converting our Roths so we don’t take a big hit when hubby has to take out money when he is 70. Soooo many tax things to consider.

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    • Laura says:

      I wish we had Roth IRAs – it definitely would have made this easier now. But, neither of us made enough when we were working to set aside enough to have made a difference. Our IRAs were funded at retirement with money our employers had set aside and were presented to us at retirement. Neither of the amounts was very large – certainly not enough to fund even one college education, and they will only provide a small amount every month when we have to start taking mandatory withdrawals. We basically spent our retirements when we adopted the girls – we knew we would never be able to build up our funds again. And, we knew we would have to get creative with funding college. But, we would do it again to have these girls in our lives even with what we know now.

      The HOA fee for the condo was high enough that we had to put money down in order to bring the P&I payment down to qualify.

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  2. tpol1 says:

    How complicated! Good thing that you have looked these things up and figured out the best option for your children.
    I am not very religious but, I am a believer and in my culture they say: If God closes one door, He will open another one. So, may be a beautiful and affordable rental home will come your way and you will be very happy there? Hope for the best! Take care!

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    • Laura says:

      This is our philosophy too. Another door will open. It was just not meant to be . . . for now. After some reflection I also think we panicked when we learned our landlord was selling this place. We had never intended to buy here, but then got swept up into it when maybe it wasn’t the right thing for us.

      Whatever we are meant to do will unfold for us. We will begin looking for a new rental after the first of the year. After living where we have been for the last 15 months, we have started to realize that maybe we don’t want to stay in this area, that maybe there is another place we would like better.

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  3. docamocha says:

    Hi Laura,

    So very sorry to hear this!!! Is there any chance that the sellers might consider a long-term rental with option to purchase once the girls are through? Alternately, possibly a family member(s) who might consider gifting the down payment to you and Brett (up to the annual exclusion amount allowed) with the implicit understanding that you would repay once the college issues are cleared? There would be no tax/college financial hit as gifts would not be income to you. Lastly, as the previous poster suggested, you might want to examine the possibility of small IRA to Roth conversions spread out over several tax years (up to the amounts that wouldn’t cause negative financial implications).
    Not sure that any of these suggestions might be viable options, but trying to think outside of the box for ways to make this work. You and Brett are such an inspiration, I wish you the best in finding solutions that work for both you and the girls. Take care!

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    • Laura says:

      I wish we had some unknown-to-us rich relative that would leave us a bundle, or that could give us a gift but we don’t. Our family is very generous to the girls though and help out as much as they can. Our son pays for our daughter’s books (a not inconsiderable expense) and will for the other girls as well. Brett’s sister took Meiling shopping and bought her all her dorm accessories, etc., but that is as much as she and her husband are able to do. We are grateful for both gifts – they help.

      We don’t have enough in our IRAs to make a Roth conversion worthwhile at this point. Even when we take mandatory withdrawals at age 70, there will be a negligible tax penalty for us.

      We moved here thinking we would rent forever. We were frankly tired of owning a home and of all the tax and maintenance issue that go with home ownership. The condo took care of the maintenance issue, but the HOA fees frankly scared us to death – we knew they could go up again. So, we will continue to rent for the next few years, and then think about buying something. There is a lovely retirement condo community here that we have our eye on, and that is more affordable than the one we were going to buy, so that may be where we set our sights.

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  4. thriftyatsixty says:

    Um, when you sold your home in the states, didn’t you sell it for more than what you paid? That means you made a profit, which increased your annual income for that year and taxes also. You do get a once-in-a-lifetime tax exemption (up to $500,000 for a married couple) or you could also forgo paying any taxes on any income if your purchase another home within two years. You also could have done an even exchange and file a 1031 form and buy another home of more or equal value with no tax or income implications.
    Have you run your decision by a qualified CPA yet? Or did you figure this out on your own? You do realize that you are beating the system and playing games with the IRS? Which is what most people have to do in order to afford college AND retirement nowadas. Technically you can afford to pay for your children’s education but instead are pleading ‘poverty’ in order to qualify for the student loans which really should be going to families who actually do NOT have any money in the bank.
    Your story is a very sad story because you are financially trapped and not free. You really can’t live your life as you want to.
    As I said, my children declared themselves as emancipated independents and because I really was broke and poor (I went bankrupt) they qualified for some financial aid, and filled in the rest with student loans, just like many other college bound kids and paid them off themselves. Why can’t your children get low cost student loans and pay for their own college education themselves and NOT tap your retirement account? Thus you can buy a home.
    Financial government aid is supposed to be for students/families who really can’t afford tuition otherwise. You are indirectly taking money away from other qualified students.
    PS: my daughter also was awarded a full scholarship but hated the school who offered it. She instead went to another college she adored at $40,000 per year (which is now $50,000 per year). And she acted like an adult, paid for it herself and didn’t have a mommy or daddy playing games with the IRS. What kind of a lesson are you teaching your children? How to beat the system??

    If I were you, I’d delete this post and keep my mouth shut. IMHO.

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    • Laura says:

      Cindi –

      Respectfully, you haven’t a clue what you’re talking about.

      Yes, we sold our house back in Portland for a profit. Enough to cover the cost of the repairs we did to it in order to sell, enough to pay for the cost of moving us and our household goods over to Hawai’i, enough to put a very small amount aside to help with costs for my daughters and my trip to Japan, and enough to put some into a small emergency fund here. There were no hundreds of thousands of dollars profit from that house, and what we made easily fell under the tax exemption for capital gains on a house.

      We are not “playing games with the IRS” or anyone else when it comes to our retirement funds. First, we don’t have mega-millions or even mega-thousands sitting in our retirement accounts. The amounts in them are paltry, and were from company sponsored retirement accounts my husband and I earned when we worked. We couldn’t live on what’s in those accounts, and they wouldn’t cover more than a couple of years at a state university. And, we are not hiding money from anyone – the IRS knows full well what went into those accounts – we rolled the money over using the IRS’s rules for heaven’s sake, and the rollovers were reported on our taxes. We are currently able to live comfortably on the income from my husband’s military retirement, a (very) small pension he gets from his company, the (extremely) small pension I receive from Oregon, and our social security. Because Brett is retired military we do not have to worry about health insurance costs (although he still pays the monthly Medicare fee as will I in a couple of years), and living in Hawai’i as retirees we have a very small tax liability. The cost of living is high here, but we know how to live frugally and simply, and I am a master saver.

      Finally, it is painfully obvious you know NOTHING about current financial aid rules. First, NO student under the age of 24 is allowed anymore to file as an independent unless they meet some very limited guidelines, like currently serving in the military, supporting their own children or being homeless. Our daughter fully supported herself last year and it doesn’t matter. She still is dependent on our income for financial aid purposes, and our income is low enough that she qualifies for federal financial aid and for her scholarship at the university. Also, every single financial aid form out there whether it’s from the federal government, state government, or the school itself clearly states DO NOT REPORT FUNDS IN RETIREMENT ACCOUNTS. Even these organizations know that having money set aside for retirement is more important than paying for an expensive college education. EVERYONE, no matter their income, is entitled to put money aside in an IRA whether Roth or Traditional, and NO ONE has to claim that money on their financial aid forms. They are not “hiding” their money to “fool” the school or government into giving them financial aid money. But, when you withdraw from those accounts, no matter the reason, you have income that must be reported, to the IRS and the state, just like anyone who wasn’t trying to buy a home. Most people withdrawing those funds do not have kids in college and do not have to worry about a bump up in their income – we’re in a very unusual situation.

      We knew when we adopted our daughters, and spent our retirement savings then to bring them home, that college would be a stretch, especially with three children just two years apart in age. It was a stretch for our son when Brett retired from the military and was minimally employed for the first couple of years. Our son earned a full scholarship – and he took full advantage of it even though he didn’t particularly care for the school he attended. Our oldest daughter didn’t earn her scholarship just because she was “poor” either – she has the required grades to back it up. And she still works and supports herself to pay for room and board. Getting our girls through school is far more important to us than any house we could buy right now. We’re not playing any games though – we’re playing by the rules.

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      • thriftyatsixty says:

        Spoken just like Donald Trump. He follows the laws and the rules also.
        There is no law in the world that says parents have to pay their child’s college education. So, emancipation means nothing. It’s when the child applies for federal financial assistance that a series of rules and laws follow. You should take a step back and listen to yourself: “Oh, geeze, we can’t buy a home in Hawaii because we have the downpayment money in our IRA’s but can’t withdraw them because our daughters will lose their financial aid”
        Say what? Where are the violins? Are you expecting sympathy or something?
        You’re just a perfect example on why, people who are on the government dole, will always remain such. You are not free. You can’t build wealth. You are under their thumb. You can never rise to the top because of the spoon inside your mouths. Thus the poor will always be poor.
        Give me a break, puh-lease?
        If you had your money in a ROTH IRA, none of the withdrawals would go towards your yearly income, thus you could buy a mansion if you so chose. How you spent your money after you sold you house is not important. You made a profit. PERIOD. Maybe you can fool yourself and your readers but you don’t fool me. I’ve been there. Did it. Done that.
        You’re trying to justify your actions and it just doesn’t fly. I can see clearly through them.
        I’m thankful the laws are they way they are. Because to those who want that spoon, they will always be doomed.
        Trust me, I def have a clue. You’re playing the system. As are most who live in Hawaii.
        No worries. I won’t be back to your blog and I won’t comment or bother you again.

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      • thriftyatsixty says:

        Let’s say you’re right and I don’t know a single thing about what I am talking about. Let’s look at me: I’m retired, living in a fully paid-for house, with absolutely no debt, a brand new SUV paid for in cash, as well as a brand new RV, I can afford 3 months in Florida in the winter and 1 month at the beach in the summer and I have a net worth of over one million dollars (after coming back from bankruptcy), my two daughters graduated from top Ivy league schools, that they paid partially from part time jobs, student loans and some parent funding, only to graduate right out of college with a starting earning salaries of $125,000 per year. (My oldest daughter just bought her second condo (and is renting out her first) and has a net worth of $1.1million dollars at age 36). My youngest is an award winning film editor (which I am certain you’ve seen her work daily in the media) and can buy and sell the both of us with just a flip of her eyelashes.
        Yup. That’s just plain old me.
        And then, let’s look at you: on the verge of being evicted by your landlord, unable to buy a home and will possibly face renting yet again under the whim of another landlord for at least the next 5 to 6 years, and struggling each and every day to pay your bills, unable to even afford air conditioning and must pretend to be broke and poor so that her daughters can qualify for student financial aid.
        Yup. You Laura are certainly right. I don’t know what the heck I am talking about.
        Have a nice life!

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      • Laura says:

        Still don’t know what you’re talking about.

        And for the record we’re not “struggling” at all to pay the bills; we’re not too “poor” to afford air-conditioning, or travel, even from way out here in Hawai’i; we’re not being “evicted.” I can afford to buy new clothes, or shop where I want for food. We don’t have to worry about how monthly health insurance will impact our budget. We do it all without ever having received a huge inheritance from our parents. What we can’t do, and have never been able to do is save the $300K – $500K necessary to send our three girls to college, because that’s what college costs these days. I don’t think you could do it either on your income today.

        Oh, and one more thing, since you insisted on bringing up your daughters wealth and achievements: our son, who went to a small private college, and then a state university for law school instead of an ivy league school, could buy and sell both your daughters. And he talks to us. And lets me post on his Facebook page.

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      • thriftyatsixty says:

        Of course you don’t know what I’m talking about. You’re delusional and unable to face up to your reality. There’s no doubt Laura that you have a hard and steep climb ahead of you to provide for your three daughters. No one is denying that and kudos to you and your husband to successfully take on the challenge. But to pretend and make up stories to justify your life decisions only fools yourself. No one else. Sorry you don’t get my point.
        Not being evicted? Then I would expect you to be living at the same location for the next three years? Oh, you can’t? Because your landlord is selling and you might have to move out and find another rental unit? Papers may not have been drawn and you may not have to appear in court but you have been ‘evicted’. You have lost your rental and MUST move out shortly. That’s the problem with being a renter. Plus you have to face constant rent increases which to a retiree isn’t such a good thing. You can’t buy a home right now, for whatever reason you tell yourself and now must face another landlord, his or her whims and live in uncertainty. Please stop deluding yourself and look at your actual reality.
        Your son may buy and sell Trump for all I care, but he lives in Japan. Not The United States of America and please don’t write me back and explain why.
        Also, I don’t find it an accomplishment if my daughters friend me on Facebook. Or better yet, let me write on their wall. OMFG!
        Let’s just drop this exchange. It’s getting silly.
        You and your family sweated this past summer. What’s the reason why you didn’t buy air conditioners? Other than not wanting to pay the high Hawaii electric bills, what’s the justification for that suffering? Oh, I didn’t mean suffering. It was just a mere inconvenience, right? A minor flesh wound?
        I personally couldn’t live like that let alone have my husband and daughters sweating like that. But hey! That’s just me. I get it that you have to live frugally….but at what costs?
        Practically nobody saves $300 to $500K for college tuition. The students work and get loans. Ever hear about the oncoming bubble bursting of defaulted student loan debt? Thankfully your girls will be free of all of that. Your sacrifice is not to buy a home or incur any additional income so that they can qualify for government student loans and scholarships. Period. No calculus needed to figure this out.
        You’re doing the best you can. I wish you could just leave it at that and stop making up justification stories to justify your actions. It is what it is.
        UGH!

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    • Melissa says:

      Cindi – I am shocked by how nasty you have been to Laura today. I hope you will take a deep breathe and realize that nasty is not the way to get your point across even if you think what they are doing is wrong.

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  5. Melissa says:

    Laura – you all are doing a great job.

    I am sorry about the condo., another door will open.

    Please don’t let Cindi get to you she has not a clue about college anymore and if you have your child emancipate themselves that seems to be playing a game with the IRS.

    Melissa

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    • Laura says:

      Which is exactly why the ability for parents to “emancipate” their children was removed – too many parents were abusing the system. We still have to claim our daughter as a member of the household, but receive no exemptions for her because she supports herself.

      We cannot get over how different the college system is now, from admissions to financial aid, than it was when our son attended school, just a little over 20 years ago. Everything has changed, and we have spent a great deal of time getting ourselves up to speed. Our girls have all worked hard (and are still working hard) in school, taking the most rigorous courses and earning good grades, to give themselves an advantage. Even that though is not enough any more.

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  6. anexactinglife says:

    It really is unusual to have 3 kids at college age and to be facing housing decisions for yourselves at the same time. I applaud your decision to move where you wanted to live out the rest of your life, to make sacrifices and to rent. And I think you are being very responsible to want to pay for your children’s college costs. Their options have been limited by where you live, and you are helping to compensate for that. When I was a student in the early 80s, I could earn enough in one summer to pay for tuition and books for the year. Now, with students struggling to find minimum wage jobs, that option is nonexistent. I am sure you will continue to enjoy life over the next few years as all of these things are worked out.

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    • Laura says:

      I attended a small, private college back in the early 70s – my tuition + room and board for the year was $4000. That was an expense my parents, who were solidly middle class (not upper), could save for and afford . . . for four children. I received no financial aid, although I know there were students at my college who did, maybe something like $700/year. My friends went to state schools in California for free, and one good friend went to medical school at UCLA – for $1000 per year (she attended Pomona College on a full scholarship).

      Our son also went to a small, private college in 1996, and won a full scholarship (tuition + room and board) based on his grades and our difficult financial situation at the time – about $23,000/year, which was totally out of our price range. He also applied to our state university but didn’t receive enough aid for us to afford it. The total cost for tuition, fees and room and board there was approximately $7,000 per year.

      Fast forward to now: That same state university now costs $25,000 per year. My daughter’s room and board is nearly $9000/year for a ridiculously tiny room she shares with another girl. She pays for that on her own; her scholarship only covers tuition and fees. The private college my son attended is now $59,000+ per year, and the college I attended is $64,000+ per year. Multiply that time four years for three kids, or the state college costs and figure out how far most people’s funds would go.

      It’s INSANE what college costs these days.

      And, we would be no better off if we had remained in Portland. Living in Hawai’i is not the issue. We’re OK with renting for the next few years until we can get these girls through school.

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      • Janette says:

        The college I attended was about the same price as yours. My parents said I could go for a year and then finish at state school. I did just that. My first year was 4500. My net there were around 4500. The private schools 45000 Andy state school is 10000 per year. I, personally , don’t know how people do it. I certainly appreciate that you hav ed given your girls the chance to attend the schools they are looking at. I’ll be praying their scholarship applications are accepted and funded as well. More power to you! You are living my dream 🙂

        Liked by 1 person

  7. Shauna says:

    oh my goodness-I love how the commentor claims you are working the system when she was only able to land on her feet through a bankruptcy. So not paying your debts and bailing on them is better than making sound financial decisions??? Wow. I am continually impressed by your good sense and decision making-don’t let a clearly bitter person bring you down.

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    • Libby says:

      I was thinking the same thing about the bankruptcy!! Let other people “eat” the cost of your bad financial decisions and then cast disparaging remarks at Laura’s, highly responsible, financial situation.

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      • Colorado Girl says:

        This comment made me laugh! I like your sense of humor! Plus, I really enjoy your blog and hearing all the ways you save money while living on such a beautiful island. Your kids seem happy, healthy, intelligent and quite independent and you and your husband seem so compatible and in love even after all those years of marriage. Congrats! Your life seems great and right where it should be!

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    • thriftyatsixty says:

      Shana,
      I filed a Chapter 13, which means I had 5 years to pay back ALL my debt. I paid it back in 3. Why don’t YOU get all the facts first yourself and not be so judgmental.

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    • Laura says:

      That would be nice! You never know . . .

      We are currently living on the east side of the island, but are thinking this could be our chance to move up to the north shore and try it out for a while. Our current house is nice, the area is lush and green, and we have gorgeous mountain views, but it’s somewhat isolated – we have to get in our car to go anywhere. We’d like to live someplace where Brett and I could walk to get a cup of coffee or such if we wanted. The south side of the island is also nice, but would put us in a different school zone, so we really don’t want to move to that area (at least for now) unless we absolutely have to.

      The real estate agent for the house keeps begging us to stay here. We’re such good renters that we’re considered an asset that could be passed along with the house! Our lease keeps us safe here until the end of next May, but we’re going to start looking for a new place after the first of the year.

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  8. Cheryl Soergel says:

    I am sorry. That is why rules have changed, to many parents say their kids are on their own when parents are still helping them. I can’t image not helping with school, that is what a parent should do if they are able. You don’t throw them out at at 18 and say make it on your own. Just don’t understand that. Cheryl

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    • Laura says:

      We let our children know long before they finished high school that we could not afford to pay for their college educations, that we would help them as much as we could (which isn’t much) but that they burden for paying for college would come from their own scholastic achievements and the financial aid they qualified for. They all know/knew and accept/ed that if the aid did not come through, either through scholarships and grants or other aid, that they would have to start at community college.

      Our oldest daughter entered college this year with a full year’s worth of credit under her belt. She also worked and saved enough to pay for her room and board for the year. Her scholarship is made up of the federal Pell Grant plus grants received directly from the University based on her grades. She will work all through college to pay for her room and board. Her goal is to finish college without any debt.

      It will be the same for our other daughters as well. We will do what we can, but the majority of their expenses will be paid through aid and scholarships. Our middle daughter will also graduate with a year’s worth of college credit, and our youngest is on her way to do the same.

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      • Cheryl Soergel says:

        I hope you don’t think I am judging you? I think it is wonderful you are putting your girls first. I feel Cindi doesn’t realize that today parents are expected even if they can’t or won’t chip in for their children’s education. I am learning alot from this, my dh will retire in the next 2-3 years and my son will still be in college. We will need to check to see how that will affect his retirement. Cheryl

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    • Laura says:

      We are sad too, but I think we have our priorities in the right order.

      I am by nature an optimist, and still think there is a house for us here on Kaua’i. Maybe not right now, but in a few years.

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  9. Karen says:

    Laura, I admire you. You opened your heart to three girls when it would have been so much easier not to do so. You are thrifty and are teaching your girls how to work hard for what they want and also how to save. Whether they go on to earn large salaries is not important to their happiness. You are showing them love and in return I have a feeling you will be paid back many times over. Owning a house is fine but so is renting. Renting actually gives you more spontaneity in your life and you aren’t tied down which can be a great thing when you are retired.

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    • Laura says:

      Thanks for your lovely comment. We have had a few “what were we thinking?” moments over the years, but our girls have brought us only joy and we know they will continue to do so in the future. Many people have told our girls how “lucky” they are, but Brett and I have always believed we were the lucky ones to have been blessed with the opportunity to parent these girls (and our son – he’s pretty fantastic, too!).

      We’re fine with renting. We moved here never even thinking about buying. We were tired of the maintenance and tax issues that come with home ownership, and being tied down to a house. Although the condo would have been a great home for us, I also still like the idea of spontaneity. We’re still young enough and healthy enough to “roll with the punches” and try things out before we make a permanent decision.

      Like

  10. Jen says:

    I have certainly learned a lot from your post and the comments. Although I had to skim through some of those comments…oy vey…..Some people!! Anyway, Laura, thank you for the education. My kids are 10, 12 and 14 and I hope for all of them to have the opportunity to go to college. I have learned a lot, so thank you for sharing. Any advice for what you would have done differently a few years ago, since for now I have time.

    Like

    • Laura says:

      If I could do something differently if would be to have paid closer attention to not just how college costs were rising, but to the changes in financial aid as well. Financial aid was all very mysterious when our son went to college, how things like the Expected Family Contribution (EFC) was figured, how and which assets were protected or not, and the different ways aid is calculated (FAFSA vs. CSS for example) and which method each college uses. I assumed it was still just as mysterious, but in fact there is so much information out there now about financial aid and how it’s calculated – we really could have been better informed much, much sooner and known what we were up against and planned accordingly. College has gotten so ridiculously expensive that even families with high incomes are receiving aid (not federal aid, but from the colleges themselves). There are many sources out there to build your knowledge of the process; just use your Google skills and start searching! One great research tool for schools I’ve recently found are the Common Data Sets – they let you know for each school the importance of different factors they use for admission (grades vs. test scores vs extra curricular activities, for example) and also give lots of information about how much aid they give and who gets it. There are loads of calculators as well for figuring your EFC – they are a good starting point.

      Like

  11. Jen says:

    Thank you, Laura. You gave me a starting point to navigate through this. The EFC changes everything–so different from when my husband and I went to college in the 90’s.

    Like

  12. Denise says:

    Well my goodness! Congrats on having a troll, that means you’ve hit the big time!! I hope you didn’t take to heart anything Ms. Thrifty said. She was so mean-spirited – and then to call another poster judgmental! I nearly fell out of my chair ha ha ha. Maybe she’ll do us all a favor and not come back, as she stated near the beginning before continuing her campaign.

    I have nothing but admiration for you and Brett. You have made thoughtful decisions, have three wonderful girls and son, and were very responsible in your approach to moving and also letting the girls know what you could manage to help with in regards to college. I hope to follow in your footsteps in a few years. ❤

    Like

    • Laura says:

      This poster has had similar tirades on others’ blogs; she does not like to be challenged or corrected, and always assumes she is right about everything, knows everything, etc. and her way is the BEST way. I guess it was just my turn. I’ve followed her blog(s) for years and the stories have changed so often she can’t keep some of them straight any more. Some of us readers haven’t forgotten though ;-).

      My favorites from yesterday were being called delusional, or that we were “on the dole” or living with “spoon in our mouth” apparently because we accept federal financial aid to help with our daughters’ college education. Or maybe because we get benefits and a pension from the government because Brett served for 22 years in the navy? It was hard to tell.

      I especially loved how she said she was never reading my blog or commenting ever again, and then came back 5 or 6 more times! CRAZY!!

      Like

      • Denise says:

        It must be hard to be her – I personally can’t live like that. Sometimes you have to let things go, or don’t start them in the first place!

        Like

      • Marcia says:

        Laura, you are so right about your “troll” changing her stories so many times over the years…she contradicts herself all the time! Cindi (real name, Millicent) will also not publish any comment on her own blog that does not praise her and tell her that she’s wonderful (her new Vlog is kind of creepy!), but she seems to feel entitled to bash others. She has some serious family issues, so please don’t let her upset you.You and your husband are to be commended for placing your daughters’ educations ahead of your own wishes. I applaud you!

        Like

      • Laura says:

        Yes, I love how she has a note on her blog that nasty comments will be “obliterated” but felt free to come on MY blog and get rude, nasty, insulting, etc. She’s a piece of work, that’s for sure.

        I knew there had to be other readers out there that had also followed her blogs over the years, and noticed how the stories kept changing over the years.

        Like

  13. Emilee says:

    Laura,
    I’m so impressed with your calm, cool composure with that “ever so informed” (sarcasm) commenter. I have followed your blogs for several years and you are always open, honest, kind, and very informative. Your example has helped me to make sound financial decisions and be happy with them. Thank you for the inspiration!
    Emilee

    Like

  14. lifeisfullofsunnydays says:

    FWIW, I think that you are making very good decisions for your family. I am shocked at how invested others are in your choices. I must say that you are a much nicer person than I am as I would not have even engaged the critics.

    Like

    • Laura says:

      I think we have made good, sensible decisions as well. We live well and have everything we need (except that $300K – $500K for college expenses).

      I listen to and appreciate comments from critics, if they are polite and their advice is solid. Otherwise I enjoy letting them hang on their own words (so maybe I’m not so nice after all 😉 ).

      Liked by 1 person

  15. Hawaii Planner says:

    First up, and most importantly, totally respect the decision you made & understand your perspective. I would have made the same call. Your girls are lucky to have parents that fully understand & research the ramifications of your decisions. . . too bad about you guys sweating & living on the dole, though. 😉

    I’ve had the same commenter make very rude comments on my blog as well (first time ever), & I deleted & moved on. I believe it was something to do with us *pretending* to be Rockefellers. Yup, that’s us. You are nicer than me for letting her stay. 😉

    Like

    • Laura says:

      LOL. She was my very first rude commenter. I remember her comments on your blog too – ugh. I wasn’t really being nice to her yesterday either – I believe in letting people reveal their true nature with their own words, which is easily accomplished by returning rude comments with “nice” for a while – for some reason it seems to set them off even more. But, she is no longer welcome here. She has been blocked.

      SO HAPPY you and your husband had such a good time on Maui. Your trip sounded positively wonderful. I’m hoping that one of these days you’ll make it over to Kaua’i!

      Like

  16. tpol1 says:

    I am so glad you blocked that commenter. No wonder her blog is taken off. If she were insulting everyone like that…

    I had found her blog few months ago and started reading but then she stopped. Oh well…

    Like

  17. Kris says:

    The really tricky thing about college is that it increases far beyond the cost of living, today is nothing like even 8 years ago. The I paid for everything really doesn’t reflect the current environment. And all the rules. You can’t even borrow all the expenses anymore, not that you were going to. Minimum wage certainly can’t make up the difference. You know as well as anyone with your son, you going back to school and now your girls have begun the college dance I doubt any of the rules are the same. I think they keep changing the rules to make sure people don’t risk their retirement by pulling chunks of money out at a time.

    You were only buying since your rental was being sold. Your house hunting was really reactionary. Buying after the girls are already away at college or done means a smaller property and a more comfortable transition to smaller.

    Like

    • Laura says:

      As I’ve said, the cost of college these days is insane, and way more than most families can even dream of covering. Here is a quote from CNBC:

      The average cost of tuition and fees at a private, non-profit, four-year university this school year was $31,231—up sharply from $1,832 in 1971-1972 (in current dollars). At public, four-year schools, tuition and fees cost about $9,139 this year. In the 1971 school year, they added up to less than $500 in current dollars, according to the College Board.

      College costs have been rising at 6% or more each year over the average rate of inflation and there doesn’t appear to be any end in sight.

      Our oldest daughter saved for over a year to cover her room and board costs this year at a public university, and she worked full time and was/is paid more than minimum wage. She will continue to work this year while she attends school and during next year to afford her room and board, although she will most likely move off campus into an apartment with roommates because it will be less than what the college charges. Financing a college education just by working and taking out loans these days is no longer possible; financial aid is a must.

      And, you are completely right about our wanting to buy being reactionary. It was, and the further we get away from buying (for now, anyway), the more relieved we feel. Now is not the time.

      Like

  18. Sherri says:

    Just found your blog. I have to tell you that I have been following “cindi” for a few years and always thought there was something off about her; like maybe a clinical emotional issue. And yes, her life stories do change. Not sure her daughters are successful at all, she is living on an extremely tight budget, then once claimed she grew up very very wealthy, etc. The list goes on and on. Anyway you are a true lady, and handled her well. BTW, she has pulled her blog off the internet.

    On the college expense front, we have 3 sons and did pay for all three to attend private colleges, But my husband earns a very nice living, and so it was not an issue for us. However, I have to say, the youngest may not be finished and we have told him, enough is enough. Anything beyond the BA is on him. They need to have a little skin in the game to appreciate the expense and work hard. Even he has stated that he will not be spending as much as we did on his own children. He thinks we “overpaid”! Great, nothing like ingratitude! He is a good kid, but even he realizes how insane his education costs were compared to the paycheck he is earning now.

    Like

    • Laura says:

      I read on another site that Cindi pulled her blog because her identity was revealed. I still have no clue who she is though, and have no interest in finding out, although I’ve formed my own impression over the years based on her blog posts and the comments (abusive and otherwise) she’s left on my and other blogs.

      Our son says these days that he is proud of getting a scholarship and paying his own way through college, that he didn’t have to depend on us to get him through, although I still wish we had been able to do more. He has been a great example for the girls, and is now able to help them with some of their expenses (he has committed himself to paying for their books & supplies each year, a not inconsiderable cost). He did law school all on his own as well – was awarded two full-ride scholarships, but chose a different school where he had to take out immense loans. It turned out to be a smart move; he interned with and was hired by a top firm before graduation for their Tokyo office, which is where he wanted to work, and was able to pay off his loans in less than a year! It’s been interesting to see the choices are girls are making when it comes to college – Meiling wanted to attend a big university (Oregon) while WenYu has settled on small liberal arts colleges for the most part (she has also applied to Vanderbilt University though). YaYu is already talking about the Ivy League! If anyone of my kids can do it, it will be her – she is one determined girl.

      Like

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