@ClassicRockerDad that was a bit intrusive, but I’ll give you some rounded off numbers. Federal was over 80k, state around 30k, property tax over 10k, Medicare looks like 9k from our tax return, and I can’t for the life of me find social security on here… I googled it and social security is 6.2%, which would be over 21k to us, don’t know if there’s an annual cap. As I said, I’d have to back out 401k contributions, medical insurance costs, medical reimbursement accounts, and whatever else is being deducted from our checks to figure out our actual taxes. Our actual paychecks being deposited to our account monthly total under 180k, plus some bonuses my husband receives which are taxed at 43%. There’s your nearly half from gross to take home. That’s alternative minimum tax for you. I live in a very ordinary, yet cute, tract house with a very small yard. It’s worth 700-800k.
Max social security withholding is $7437 this year.
I certainly don’t expect anyone else to pay for my kids to go to college. My husband and I were paying off our student loans in the years we should have been saving for our kids, that’s just how the cookie crumbles. We certainly weren’t making the kind of money we make now during those years, but again, it is what it is. We also chose to have a big family, again, that’s on us. Want to know what does chap my ass? As we’ve established I’m paying through the nose in taxes. The U.C. System which we Californians heavily subsidize got busted for admitting out of state and international applicants with lower stats than California applicants because they made more money off of them than us. There is no percentage of U.C. Admissions reserved for California students like there are for many other state flagships. My daughter doesn’t have UCLA or Berkeley stats, but the overcrowding trickles down to UCI, UCD, UCSB, UCSC. The state flagships we pay for should be there for a California kids and they’re not.
The bonus might be withheld on at 43% but is not necessarily taxed at 43%.
Right, that all worked out in the end. At any rate, those are my taxes, and that’s my take home. We did have a small refund, but we owed most of it to state, so basically a wash at the end of the year. When people suggest we as a country should raise taxes on the “rich” I don’t think they understand who they’re talking about or what we’re already paying. Donald Trump has paid no federal taxes in 18 years, I’ve paid who even knows how much in that time. 51% of Americans pay no federal income tax at all, lots of people make a profit off of income tax in the form of child tax credits that exceed what they paid in in the first place.
Sorry to be intrusive. You are probably double counting medicare since the Obamacare component (1.45% over $250,000) is on your tax return, but the normal part (1.45% on the whole thing isn’t). Why don’t we just assume that the $80K included the Obamacare portion so that on $350K, the normal medicare is $5075.
Then you have
Federal $80K
State $30K
Property: I’ll give you $12K
Medicare: 5075
Social Security maxed out on two incomes; $14874
Total: 142K ~ 40%.
Yes, that is a pretty high tax rate, but after taxes, you got $350K-$142K= $208K.
Now let’s deduct the maximum 401K for both of you ($24,000), assuming that you are both over 50.
That leaves $208K - 2*24K= $160K for medical insurance and the rest of your life. I mean, that’s not bad.
No disrespect, but what am I missing?
People do move from one state to another for a variety of reasons. I know a gal that has MS that moved to a state where there was a network of MS resources, better healthcare options at lower cost - including more affordable insurance cost (which that may not be true today, based on what has transpired in that shifting paradigm).
I agree it is absolutely wrong for in-state students to not have priority - meeting admission criteria, with decent stats, over OOS/foreign students to attend a public California University. The states I have lived in, a local/commuter student may not get into the University as a freshman, but can as a transfer student if their grades are good at local CC or at another school. It would really bite at me too as a tax-payer in California to have the college system not be user-friendly for my children.
I believe the sizable number of foreign students attending California universities has been the reason why global stats for college ranking has been skewed - for several years MIT was #1 (unlike US rankings where it is between Princeton and Harvard). Several UCs in the top 10. This current ranking is still a bit CA skewed:
Here is hoping people on this thread can navigate ‘the system’ and find what is the best fit for their student/family situation. And the answer is not taking out big student loans.
Perhaps some of the schools desired will work out financially, and maybe not. We didn’t even go down the road of OOS/private due to what was available (with scholarship) within our state. My students could have gotten their education at our local commuter college (offered their degrees and with scholarships) but (one in and one done) they attended where they have more educational opportunities with their major and with the University on other areas, and w/o debt due to savings, planning, and scholarships. They of course were excited about being away from home. But they are also graduating with no debt. We have taken money out of retirement funds for a wedding (not a big amount, and not with penalty due to our age), but not for college. I understand about taking a home equity loan as an option - but careful on that too - we did that in the past and not sure it was a wise move.
My husband grosses ~$60k (less than 1/3 of your net). His check is subject to payroll deductions just like everybody else so he doesn’t bring home $60k/year, but there are still plenty of NPCs that spit out $20-40k/year price tags based on our income. We aren’t finding that colleges are standing in line to offer us money either.
NYS isn’t known for its low taxes – our yearly property tax bill is over 8% of our gross income. We pay school taxes for a system that doesn’t have the resources to provide the interventions our dyslexic, dyscalculic, dysgraphic daughter needs and we can’t afford private school, so we homeschool. That costs us money.
Our son is a college sophomore. Even with a gross income of just under $60k we get very, very little federal aid (a few hundred/year). We could afford ~$20k/year from current income, our son’s summer work earnings, the AOTC, the federal student loan (which we’ve said we’d repay) and his college savings, but he doesn’t like debt so he chose to commute.
These are all choices. My decision to give up my job at CBS to homeschool doesn’t entitle my family to more money, and we don’t envy the families who are paying for college with full federal and state grants, the max federal loans, work study, and multiple jobs (held by both parent and student). We chose the schools we could reasonably afford. It boggles my mind that a family netting 3x my family’s gross is struggling to afford to send their child away to school, but we weren’t aiming at $40-60k/year schools because they’re totally out of our price range. Maybe that’s the difference.
How about reform to the costs of a distorted system, that increased 1200% in the past 30 years (higher than healthcare, housing and just about everything else)? Costs are just as important and maybe more so than who pays. And not all states have cost effective options.
http://www.salon.com/2014/06/08/colleges_are_full_of_it_behind_the_three_decade_scheme_to_raise_tuition_bankrupt_generations_and_hypnotize_the_media/
Everyone deals with their income/expenses/situations differently, but I agree with @austinmshauri that understanding what is affordable w/o what is ‘fair, right’ - all life is not fair. So if parents can understand where they are and what they are willing to do to assist in college costs, and their student understanding what his/her options are.
Some students think “I have worked so hard, I deserve…”.
IMHO, our students are blessed to have the level of education, resources they have in a world where that is not the case for so many.
Again, my point was that someone in this thread made the comment that if you make over 200k a year you can afford full pay at any college, that simply isn’t true. Do I live in poverty? No. I grew up in poverty, I very well know the difference. We make a lot of money on paper. We have no extras, no vacation homes, designer clothes, fancy cars, we are not living high on the hog. We live in one of the highest tax states in the country, we pay the highest rate of federal alternative minimum tax. Everyone in this country doesn’t pay taxes just like us, people earning less are taxed at a lower percentage, again 51% of Americans pay no federal income tax. The people above us use loop holes and tax shelters to hide their income, so they’re not paying either. I was explaining how someone with an income of 350k raising four kids in Los Angeles, one with special needs, and two in college next year is having trouble figuring out how to pay for it. I’m not asking anyone for anything. My son did attend junior college and will be transferring next year, that did save us money. My daughter has over a 4.0 GPA, I don’t feel right making her go to a JC, she put in the work where her brother was a more mediocre student. We will figure it out. We will likely have to tap into our home equity, our kids will likely take out small loans and they will definitely have to work.
It’s amazingly arrogant how people think they know more about your finances than you do, @socalmom007.
@socalmom007 Everyone’s family situation is different. Everyone will have challenges. But those challenges don’t change the fact that people making over $200k a year do have the money available to be full pay at college.
You have made choices (and many of them may be admirable for your family’s health and happiness) that have used up your net income of $180k. Explaining your reasoning of why you felt your choices were good/necessary for your family does not change the fact that most of your income goes to pay for your choices.
- It was a choice to buy an expensive house. It doesn't matter how 'modest' your house it, you chose to buy a house instead of renting something more modest. Renting could have saved you on both rent and property taxes.
- It is a choice to pay for private school. You may have great reasons for wanting to do so, but many people have children with disabilities who cannot even imagine choosing private school because they gross (like @austinmshauri) $60k a year.
- It is a choice to live in California which is a high tax state.
You may believe your choices are not analogous to taking expensive vacations, or buying flashy cars…but they are. Unless you are donating your money to charity - you are spending your money the way you have decided to. There are parents who choose to send their children to public school so they can take the yearly vacation. Or buy the new car. Those choices aren’t less worthy than yours. Just different.
Your ‘explanation’ of the trouble you find yourself in in terms of structuring payment for college is like me saying, “After eating a full plate of food - my plate is empty! I’m just like the other people who have nothing on their plate at all!” You’ve have eaten a full plate of food with your income. Complaining that ordering dessert will cost you more money is hard to swallow for those who don’t have anything on their plate, or they have the equivalent of a cheese sandwich.
Many of us face the same issues you face. We are raising 3 children and have chosen to help them follow their passions. My oldest is a musician. We have spent $10s of thousands of dollars on lessons, instruments, travel, etc to help oldest follow this dream. But I would be embarrassed to say to people that our family should get money for college or that I was having a hard time figuring out how to pay for college because we have less money due to our choices. We would have plenty of money available had we not spent it on lessons, instruments and travel. Our choice. We, too, bought a house. Spent a lot less than you chose to (we, too, live in a HCOL city) but we could have decided to rent instead of buying and it would have allowed us to save more money. We do go on vacations - again, money that could be saved but we decided it was important to our family to take vacations.
So, we are already trying to make sure we have a plan in place to find schools that will work for oldest that we can afford. That might mean oldest doesn’t get everything on the college wish list. Oh well, that’s life. There are plenty of places your child can go to school that will give her great merit aid. She might have to leave California to attend those schools. That’s life as well. Staying in California for school is another choice. A really expensive one it looks like.
Again, I’m not asking anyone for anything. I was giving another perspective. If you don’t choose to hear it that’s your perogative. As I’ve said repeatedly we have made our choices and we own them. We chose to have a big family. We choose to send our younger two to private school. I’m a teacher and I know exactly what my local public school district has to offer my autistic child, no thank you. I would sell the shoes off my feet to pay for the education he is getting which will enable him to have an independent future. That is an active choice we are making. We do choose to live in Southern California with high taxes, high cost of living, and crappy schools, though my husband works in an industry based here and wouldn’t make his salary elsewhere. We did choose to buy a tract house to raise our family of 6. We could have chosen to rent, you’re right. Thank God we chose to buy when we did because now we have equity we can tap into to help put our kids through college, and tapping into that equity will be a choice we make too.
No one is saying they should “get” money to pay for college or complaining, just explaining constraints. Which to me is pretty different than saying they find themselves in trouble. Everyone makes choices and has their own limiters as a result. We have made ours and own them. We too have spent money on music lessons and vacations. Those are luxury items. I am grateful I can give those to my children. Beyond grateful. I work hard to be able to give that to them. I would do it again in a heartbeat. Am I complaining that I am broke because of it or that I can’t pay for college because of it? No. I would rather have those shared experiences with my family, give my children the gift and passion for music that 3 out of 4 have taken with them (or plan to) to college and for the other child that didn’t take music to college, she took soccer and the monies spent there were worth every penny.
To give that up so I could pay what our EFC says? No. As I mentioned before even if we had 80k annually to spend on tuition…I wouldn’t do it. Will those vacations take a hiatus while the kids are in college? Yes, they will. I wouldn’t trade having those trips with my kids for anything in the world or our ability to support their areas of passion.
I think the important thing is understanding that everyone has their own budget for their own reasons and none are really “wrong” they just are what they are. Everyone here is simply trying to navigate what is the best option for their child with the funds they have to work with, whether it seems like they should have more to work with, then they in fact do.
Wish you well @socalmom007 maybe after all is said and done you can tell us how it all worked out. Hopeful for her to have good options she likes 
my point was that someone in this thread made the comment that if you make over 200k a year you can afford full pay at any college, that simply isn't true
@socalmom007, I think the point was that in most typical situations >200k income probably implies ability to afford full pay. Noone said opportunity costs wouldn’t be involved, or that >200k income=swimming in cash with multiple Teslas in the driveway. Now, 200k might not be the right number in every situation, but from what you have outlined of your own finances it is clear that the ability to pay is there but that there would be trade-offs. Admittedly, 4 kids and one with special needs may complicate things. But contrast your situation with a family grossing 80-100k and you can start to see that they have a different set of choices than you do.
You have brought up the % of folks not paying federal income taxes a few times (it is actually closer to 45%, not the 51% you claim). I’m not sure how this is relevant to the discussion of what you can afford.
The worst thing I ever did as far as college goes is perhaps the 1st thing I ever did…which is that I researched Harvard financial aid and found out that a family making $140,000 a year with one kid already in college would only pay $14,085 a year for their kid to attend the school – total.(and I think I read it in a magazine…didn’t even run the calculator myself). So I thought, wow, this is great! Only then to find out that 1) savings are a problem 2) owning real estate is really really a problem (my husband and his siblings had purchased a townhouse for their aging dad and it was put in our name) and 3) kid savings are an issue.
Now my kid had no chance of Harvard and wasn’t applying but i got it into my head that 2 people (to give an example) could make $70,000 each and receive really significant financial aid from other schools too.
But as others have noted, its way more than income…and few schools are like Harvard.
We do choose to live in Southern California with high taxes, high cost of living, and crappy schools??
@socalmom007 FYI-my kids go to those crappy schools(I assume you mean public). Well one just finished and he is a freshman at Stanford and my younger one is a high school sophomore and doing well. His friends from that same public school(1-MIT, 1-Yale,1-Princeton, 9 to Berkeley around 12 to UCLA. these are just the ones we know about.) Like I mentioned before I agree with you on your youngest with special needs but your other kids would do just fine in those crappy schools. I lived there for over 20 years and yes LAUSD has lots of problems but don’t disparage the schools for something in them that you deem unworthy.
Socalmom’s posts on this thread highlight a very valid point - that $200,000/year in annual income in California is not the same as $200,000/year in…oh, let’s say…Mississippi or Arizona or Montana.
Sure, it looks on paper like their family might be swimming in dough. But the cost of living differences from one state to another or even one city/town to another can be quite startling.
For example, if we were to move to Southern California and made the same annual income that our family does here in Arizona, our income would essentially be reduced by 25-30% (you can look it up - Money magazine has a cost of living comparison tool) because everything costs more in CA. Gas costs more, groceries at the grocery store cost more, clothing & shoes to clothe your kids, etc. Going to the movies, for example (ok yes it is a bit of a ‘luxury,’ but the average family does like to go see a movie once in a blue moon), costs WAY more in So Cal than it does here. Our local movie theater shows new releases for $4.25-$5.00/ticket. I can go to Walmart and get movie theater candy for $1.00/box and smuggle it and bottles of water into the theater and we all get to go to the movies for $20.00.
That’s unheard of in CA.