I have not saved much for my retirement. I am 43 years old and have 24 years of working life before retirement. If I take out a loan for my sons college, then that would at least be 15 years of paying it and not saving for my retirement. So, I would only have 9 years to save and that is absent illnesses/sickness in the family. Also, my job in the oil fields is a critical condition right now. I am among the lucky ones who were not laid-off and I am hoping to stay in this job for a long time.
If only my sons could guarantee taking care of me in retirement, I would probably go all the way to help them in college. But as you all say, I cannot expect that.
If you were used to living on a $50 or $60k salary, you should continue to do that, putting the max into a retirement account ($18k into a 401k or the max into IRAs) and save the rest for the education funds. Even with the increase in taxes you must pay, there is a lot left over. Don’t adjust your lifestyle to fit your new income.
I am shocked at the people saying they expect financial support from their kids. I can understand expecting help in an emergency or something but beyond that? Are we talking about total financial support?
YOU are an adult. YOU are responsible for your finances and your lifestyle. In twenty years you’ll be retirement age and your kid will be close to your current age. How is your kid supposed to save for his retirement if he’s supporting yours? What if he doesn’t make enough money for your retirement? What if his future spouse doesn’t agree with the economic outpatient care and it causes a rift in their relationship?
You make 170,000 and you have decades until retirement. That is plenty of time to prepare. The median income in this country is about 53,000. Figure out how those people live (including college costs) and then save the rest.
If you are putting in $17k,that’s close to the maximum.
You do what you can. I had a similar big bump in salary for a short period when my kids were in high school. We still lived like we were low income and I just socked as much into my 401k and savings for college as I could. Still drove the same car, still gave them the same allowance. We did splurge a little, one child was on a travel sports team that cost more than I could have afforded when I was making less and one child went to France with a high school group, but for the most part I still used coupons at the grocery store, still looked for clothes and shoes on sale, still made the roast chicken last for two meals.
Unfortunately no. You also not obligated to pay for their education. This is your gift to them and you cannot expect return on your gift. Saying that, hopefully as we have moral obligations to support our children, they will have moral obligation to support us. Hopefully we will not need that.
OP has a well paying job but, if I understand correctly, his previous employment was a minimum wage job. If he’s laid off, that will be a problem. And his current job is dangerous to boot. I think he needs to save as much as he can and be conservative when deciding what he can pay for college.
^ Yes, what austin said. OP, you have to set aside more than the maximum allowed contribution to retirement. Set aside enough additional savings to carry you and your family over, if you lose your job, get injured or can’t keep up with the physical demands.
Explain the reality to the kids. Do not count on them paying you back or supporting you. If they do help you, that’s nice. But don’t count on it. Not now, while they’re still in hs, before they develop careers and find jobs.
@majorcarter I agree with you in principle, but I don’t think that OP is asking from an entitlement position. He is trying to meet his son’s request and the only way to do so is to sacrifice his own retirement. Good motive, but bad plan. The son needs to understand that going to the school out of town hurts his dad (parents?) and thus isn’t a good plan.
Break, break, the other problem with having one’s kids provide for you in college is the kids likely won’t hit peak earning years until after the parent’s need the money. Even if one is doing well, it’s late 40’s to 50’s when most people’s career is established and has cash flow to spare after retirement savings and basic expenses. And then guess what, that’s when said people need to pay for their own kid’s college.
I agree with post #21. Keep living your 60K/year lifestyle even though you are now making 170K. Invest the maximum yearly amount into your 401K. Invest the remainder in mutual funds (I’m particular to Vanguard index funds because of the low fees) and consider putting some of this money in 529 accounts for your kids.
Yes, my job is in very critical point. I’m worried that one day I might get a pink slip. However I am one of the few that were kept to stay, with company’s prospect that crude oil prices may rebound.
I even told my boss that should they need to cut cost, I am willing to get a pay cut. Well I’m thinking that’s better than going back to working minimum wages.
“Of course I expect support. That’s what ‘family’ means”
Well that advice is as helpful as a 3-legged race horse. Like other posters have said, in certain cultures, this arrangement is sacrosanct. However, the OP has not indicated this and is asking for sincere advice.
@dad3sons I think you’ve been a great example to your sons of perseverance. A great lesson for them will be to for you to further model financial responsibility – and that includes making tough decisions in the face of reality. For you, it’s to set firm limits for your kids and not for you to take loans. You don’t need to discuss with them the details (annual salary, the amt you need to massively pour into your retirement) other than to say “this is what is financially responsible” and as a family, you all go forth. Frankly, say that given your history, your family is incredibly blessed to have what it does. If your fortunes had not changed, your contribution would have been zero
Best of luck to you, your sons, your safety, and your job security!
“this is what is financially responsible.” And, ‘I’ve only had this position 2 years. We may breathe easier, I may have been able to now give you some treats. But this income level is not guaranteed. Not even for your college years.’
Imo, the massive loans are risky. If your job stays, that’s one thing. But your kids will have loans, too (I think you said.) One problem and you could be in a deep hole. They need to understand.
It’s called cultural expectations, and they differ in different cultures within the United States. I’m glad you posted because you gave us a cultural perspective that some of us might have ignored.
So you made minimum wages and managed to live on $20k per year? Isn’t your take home pay (after federal and California taxes, SS, medicare, 401k contribution) $7k per month? Where is all that going now?
I think I’ve already established that support from my children when I retire is not to be expected. I am just wondering about real life experiences. I for myself lately give some support to my dad who is sick due to COPD. But that is because I can afford to spare some extra money now.
I am wondering that if my sons go to a nice university like UCI or UCSD, that could jump start their career quickly and be financially stable a few years after graduation compared to other unknown university that may take them years to get that stability. But then again, loans may hinder that financial stability and we all end up in deep financial problem.