[Andrea]

WWYD?
I feel the need for change but having a hard time determining what change and what’s “fair?”

We are 40 and 41, with 5 kids – 11th, 9th, 8th, 6th and preK. We have been saving $100/mo per kid per month their entire lives.

Current balance:
1 – $51k
2 – $44k
3 – $40k
4 – $26k
5 – $5k

Child 1 had a heart transplant out of the blue less than 2 years ago. He now feels college will be best for him and his future.

He can get financial help through a disabilities organization in our state, though I’m honestly not sure if it’s $1k a year or $10k a year.

He would need to stay local at least first two years/live at home so max probably $15k a year cost.

Child 2, 3 and 4 – won full tuition scholarship to local 4 yr college

Child 5 – well, she just turned 4 so no plans
1. I feel like with the college tuition in place, there is no need to continue to save for child 2,3 and 4.

At most we’d continue for the next year till child 1 graduates. Maybe continue for child 5.

Retirement is pretty solid with 2 pensions, 401ks around $450k, about half in Roth TSP (gov’t 401k). Roth IRA $100k. 3 investment properties.

Home value $1.5M which we owe $200k. Net worth $3Mish.

1. Is it “fair” to move around kids college funds if they end up not being needed for college?

Say kid 1 needs $60k so we take a little from kid 2/3/4, or kids 1-4 get through and we move the remaining to kid 5?

My gut feeling is that had they received full scholarships through working hard in sports or academics, ok, let them keep it, but it was semi random/lucky how they all got them and definitely something dad and I were a big part of.

And if you think stopping all contributions make the most sense, would you just redirect to a Roth IRA?

Or use towards working 1 day less per week to focus on my own medical issues and with my kids that are homeschooled and preparing to launch?

(We definitely feel like we live paycheck to paycheck right now).

[Noah]

Unless your kids are fully aware of the balances and feel entitled to the amount..

I would personally move the balances to wherever they need to go. If C1 and C5 need funds, and C2, C3, and C4 don’t, then move the funds to C1 and C5.

If the children feel entitled to the money I would still probably do the same thing, but it would definitely be a harder conversation.

I would absolutely contribute any excess funds to a Roth 401(k), especially if you are not reaching your employers match at this time.

If you are, a Roth IRA may also be suitable for more flexibility, assuming you want to invest post- tax dollars only.

[Brittney]

So, you can withdraw, without penalty, funds equivalent to what they earned in scholarships. Just so you know that is an option.

But personally, I would:
Stop contributing new funds.

Then, “roll over” the funds to the youngest and others who need it. Then, when all kids are out of college, I would “roll over” the rest to a Roth IRA when you are at the age eligible to do so without a penalty.

As far as your last question, life is short and time cannot be bought.

Take the time off now if you can and take care of yourself.

Put on your own oxygen mask first.

[Stef]

It’s totally fair to tailor finances to the specific needs of each kid. Be aware that tuition is only one part of the cost of college.

Room and board can be crazy expensive.

Also consider what you’d do if kids 2-4 wanted to attend a different institution (maybe the scholarship institution doesn’t have their major, or they want to play a sport).

[Sara]

I’m so curious how kids 2-4 won scholarships?! Would love to hear more about what if you’re able to share.

I think it’s perfectly fair to share the funds amongst your kids – at the end of the day, it’s your family’s money that you and your partner have decided to invest in your kids future and they will be grateful either way.

[Valoree]

Honestly I feel for young adults I truly don’t know how they will and are making it in this economy.

Maybe they can use these savings for a down-payment on a house, or just to start out in their young adult lives?

[Joy]

The money in the 529’s are not owed to my kids. They know that anything left goes to the next kid or to me.

I think it’s perfectly ok to move money around once you are certain kids 1-4 won’t need it.

Keep in mind that room and board can be more expensive than tuition so unless their scholarship covers room and board, you might need more than you think.

After scholarships, my son’s school was $5k/yr. But room and board was $16k/yr

[Stacey]

How did 9th, 8th and 6th graders win full tuition scholarships???
Because frankly there is too much time between winning the scholarships and kid actually going to college that I believe that scholarship is actually going to be there.

The college funding landscape is changing quickly right now too.

But you could definitely slow contributions. Fair does not mean equal.

[Marilyn]

1. Have any kids contributed their birthday money or any money to those accounts?

2. Can kid #1 work a summer job to help cover costs for school?

3 Is each kid aware of how much is in each account?

Personally, I love the idea of some buy in from the child to reduce school costs.

Even the kids who got full tuition scholarships. Can they work to get extra scholarships for room and board?

Then they can keep whatever money is leftover in those accounts to get started in adulthood.

[Amanda]

They may not all want to go to Wright State. I got a full scholarship to a school I never considered actually attending.

They may not want to live at home and you’ll need all that money and more for room and board.

You can always move things around later if you need, or transfer $35k to a Roth IRA.

I would keep contributing if you can and figure out down the line how best to distribute.

[Ava]

I would at least leave $15k for each kid and do the Roth IRA roll over for them to start their retirement as a “reward” for doing so well and saving so much! Since each account will be open for the 15 year requirement, this works out perfectly.

Show the kids what compound interest will do with it at their retirement.

Move all other money around as you see fit. Congratulations!

As a fellow parent of 5, we’ve been transparent about their 529, we capped our contributions to $20k each so that they would attend a jr college and have a little more “skin in the game.”

Yet we have told them that should they receive any scholarships or full rides that the money is theirs for retirement (Roth roll over) and any extra they could use to help fund a down payment on their first house.

[Michelle]

If I’ve learned nothing in the past two months, I’ve learned that any promises made by anyone about paying for postsecondary, you 100 million percent need a backup plan.

[Author]

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