I read ‘Die with Zero’ and we’re starting to rethink our plans

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  • #86792 Reply

      We have a kid going to college this fall and were planning on cash flowing for them and their sibling, when the time comes. We know that this will involve some sacrifices, like family vacations, non-essential home improvements, and some luxury items, but thought it was well worth it. We also knew, in the back of our minds, that we could tap into an IRA if needed, because we’re well on track to FIRE and paying all of college would only delay our FIRE date by 1-2 years.

      Recently, however, I read ‘Die with Zero’ and we’re starting to rethink our plans. We have enough in Roths to pay for most, if not all, of college and are wondering if it would be a good idea to tap into them now so that we can really take advantage of the years we still have while our kids can more freely travel and enjoy their school breaks with us.

      We’re conflicted, as we can see that a decade from now the money might have significantly less value to us (in terms of experiences and making memories) than it does now, but the idea of using our retirement funds for something other than retirement is hard to come to grips with.

      We’d appreciate your thoughts and ideas on this.

      #86793 Reply

        I’d have the kid contribute to paying for their college before I’d draw out retirement funds.

        I’ve seen too many suffer in their old age due to not having enough put back.

        #86794 Reply

          Higher ed professional here: there are so many ways to budget and pay for college that don’t include using parents’ retirement funds as a blank check. Do make sure they do an SAT prep course and take the test multiple times to get their best scores possible…will pay off in scholarship offers (test-optional schools really aren’t).

          Most private universities will offer significant scholarships to those with good HS credentials/scores to compete with public university tuition. Summer jobs and internships not only help with $, but also make them more attractive to hire into professional jobs after graduation. Public universities offer great opportunities and alumni networks at lower cost.

          Going somewhere closer to home also cuts expenses. Work with them to make these important financial decisions…provide a reasonable budget of how you can support them, and let them be responsible for whatever goes beyond that.

          Good luck!

          Don’t miss: I have a traditional IRA and want to do “back door Roth”

          #86795 Reply

            Roth money is the last of your investments funds you use since it’s taxed and will continue to grow tax free as well as an growth is tax free.

            #86796 Reply

              After working in higher Ed for nearly 20 years, the most optimal route I’ve seen is to attend community college (in a few states this is now free tuition!) for the first 2 years to get the electives done and then transfer over to a university that has an articulation agreement to complete the bachelor’s.

              While in school, pursue leadership roles like RA to eliminate yearly room and board and student senate/other leadership roles to receive a stipend.

              Pursue 2-3 internships over the 4 years; this is what employers find most desirable when hiring recent graduates. During summer, work as a summer RA for visiting summer groups and graduate residency programs for free room and board while working a summer job (either on campus or nearby) to pay off whatever debt has been accrued in real time before graduation.

              Bottom line, there’s no need to sacrifice anything if attending college is approached smartly and intentionally and there’s not a ‘keep up with the Joneses’ mentality that will add thousands of dollars of unnecessary debt.

              #86797 Reply

                If you have plenty of money for retirement, I’d do a bit of both. Give up some things but not the vacations. My husband and I traveled often with his awesome parents when we were in college. I have the best memories there because we were really broke and so appreciative of the trips that we really enjoyed them!

                Made a bond with his parents for me that I will always have and obviously they loved traveling with their child. Now we are in our 30s with young kids. We travel with them maybe once every few years but still see them often. However I wouldn’t trade those trips we did in college with his parents for any amount of saved money in the future and they said they wouldn’t either. That season is short and is over now and we can’t go back.

                Explore these too: I got laid off from my job few months ago and moved my 401K to my IRA account

                #86798 Reply

                  There is no wrong answer. What does your heart tell you. We cash flowed our youngest. Scholarships. She worked as a licensed masseuse for a chiropractor during undergrad. Any money left over from student loans was paid back when the new ones arrived. Parent Plus loans. Etc. Paid for undergrad with her help in 5 years.

                  Graduate school we pulled the equity from our home and bought a 3 bd 3 ba house in Oakland and rented out 2 rooms.

                  She worked opening Starbucks. Returned all extra money on loans every quarter when the new loan came in.

                  She just finished residency with $234k loans, but a negative net worth of only -$100k because of investing in real estate.

                  NOT humble bragging. Be creative! Don’t think outside of the box. There is no box! Good luck!

                  #86802 Reply
                    • Make sure you have insurance first in the event people get sick from your produce. You’ll be covered.
                    • I would call smaller grocery stores to speak with the produce manager about selling your apples to them. This would be easier entry versus the big box grocery stores.

                    My husband called a few small local grocery stores in our area & developed a rapport with them to sell our exotic fruit.

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