<p>Schools add in the contribution MADE to retirement accounts in the tax year for the FAFSA/Profile. The balances are not considered assets.</p>
<p>But really, one would need to be earning a very large amount of money to be able to contribute enough to have a $10,000,000 balance in their retirement accounts. And for some accounts, there is an annual limit on the amount one can contribute pre tax. </p>
<p>DH and I are happy with what we will have for retirement income. We will be able to pay our bills,and enjoy life.</p>
<p>Re: leaving money to our kidsâŠwe want to see them enjoy any gifts we make to them while we are aliveâŠso we give them gifts annually now.</p>
<p>DadIIâŠjust FYI, if you leave each kiddo $300,000 as an example, that amount will be considered when their kids go to college, and they just might not get any need based aid! Just saying!</p>
<p>^^^That was my good news/bad news when my father passed away. We had the funds to pay full fare for college, and too much to get any sort of financial aid at all.</p>
<p>We are counting on a defined benefit pension - with the understanding that if the city goes bankrupt, we are screwed, and that if there is any inflation we are also screwed (no COL adjustments to pension.) We will also have SS and have a very, very, very modest (did I mention, very modest?) start on a ROTH IRA. Home is 2.5 years away from being paid off, and we have no debt apart from the home. It is all well and good, and when home is done being paid for, we will funnel that money into savings. We earn much smaller amounts than many of you good folks on CC, but we are also fairly frugal, so our splurges are small. Of issue will be how much assistance my MIL and FIL will need as they get on in life. We have not had any frank discussions about this, but I donât believe they have any LTH insuranceâŠ</p>
<p>âI am not a FA guru, but I do remember Dad IIâs D practically went to Stanford for free because of the family EFC. I am just curious to know how someone could be paying nothing for college few years ago and now is going to accumulate 10 mill before retirement. I am not trying to be disrespectful or pick a fight, one would have to save close to 1 mill a year before retirement. Do schools factor in 401K or equity in the house when trying to figure out familyâs contribution?â</p>
<p>I believe that some schools do not figure in retirement assets and home equity as far as FA. I have no idea if Stanford does, but I find it likely that there are people eligible for large sums of aid, while they have substantial assets. Those of us who get our income through employment are reamed as far as taxes and FA, but some are able to structure their income to be very low, while their assets are high. Some are now eligible for Medicaid, with no asset test, because their income is low, though assets can be at any level.</p>
<p>I donât see anything wrong with utilizing the system as it stands. Though I think the tax laws, Medicaid eligibility and FA formulas should be changed, taking the benefits of how the system is, is available for anyone.</p>
<p>I think from what I remember Stanford only counts 2.8 your salary in home equity max.</p>
<p>Well the way I see it if someoneâs kid went to Stanford and the parents still have to leave something for the kids then that Stanford degree is not quite helpful or in programming term we call it a âNO - OPâ as in No operation because it does nothing. :D</p>
<p>âWell the way I see it if someoneâs kid went to Stanford and the parents still have to leave something for retirement then that Stanford degree is not quite helpful or in programming term we call it a âNO - OPâ as in No operation because it does nothing.â</p>
<p>I donât know about that. I guess itâs a matter of what person or organization would you prefer to leave it to instead of your kids? I havenât come up with anything better yet, though I wouldnât be surprised if one of my kids ends up being a billionaire some day, because that is possible for those in the tech world with big ideas.</p>
<p>^I was kidding of course, as I do always. That is why the smiley face. However, I do have high expectation for my state school kid and my non-state school kid. I expect one to be very successful and donate half of her money(like she is already doing) and the other one to be reasonably successful.</p>
<p>I think I mentioned it⊠but am really not counting on it. If my parents spend it all or lose it all, I am making sure I still wonât be a burden on my kids. But if I do get a decent sized inheritance, it will make retirement more comfortable AND maybe I can (like Dad II) leave some for my kids, too. I have to say that I am thinking about moving, and I am looking carefully at the tax laws surrounding inheritances in the states I am considering.</p>
<p>âI was kidding of course, as I do always. That is why the smiley face. However, I do have high expectation for my state school kid and my non-state school kid. I expect one to be very successful and donate half of her money(like she is already doing) and the other one to be reasonably successful.â</p>
<p>Ah, well some people are pretty insistent about not leaving much to their kids. I donât see that people should sacrifice greatly so the kids can have a huge heap of money, but hey if thereâs anything left, why not?</p>
<p>Thatâs great that your kid is donating half of her money, though if sheâs making the big bucks, sheâs already âdonatingâ half of her income to taxes, and if she donates the other half, sheâs living on thin air. Funny how the more income I make, the more Iâm thinking of taxes being a charitable (while involuntary) contribution.</p>
<p>Ha! @bunsenburner - H and I were just talking about this yesterday. His dream retirement is to retire from his current job, then go post-doc somewhere for one of his many professor friends so he can get back to the lab work he misses so much. And he pretty much knows people just about anywhere in the country. So our options are almost unlimited. Both kids live on opposite coasts, and we are relatively close to the middle; anywhere we move to be closer to a kid, puts us farther away from the other. Not a scenario I like. </p>
<p>No replaced H when he retired. As expected, it has remained vacant and the many folks he trained are trying to fill in as best they can, with him helping as he can. They will be moving all operations to DC he believes, centralizing, until they remember how much is lost again and then maybe re opening in HI </p>
<p>Busdriver11, I was afraid that rental property might be part of your diversification. We owned one rental, years ago, that was trashed by the tenant (a relative, no less.) Dh said never again. </p>
<p>We recently took another look at property in FL and were dismayed by the taxes. (I donât even want to think about the cost of HO insurance.) Dh mentioned that for what weâd save on property taxes by remaining here, even if we donât downsize, we could rent a very nice vacation home for 6 to 8 weeks every year and not have to worry about hurricane evacuations.</p>
<p>On the plus side, D1 has decided that it might be nice to have us retire near her after all. Sheâs even offered to let us live with her for however long it takes to build our retirement house. I think she was shaken by her dadâs recent health scare and suddenly realized we wonât be around forever. It was sweet, but we assured her that we wonât need to move in with her. I hope to start construction on the next house before we leave this one, to make the move easier. The question is when, since dh changes his mind about retirement frequently. </p>
<p>Nice daughter, @silpat! I think my kids would laugh if I suggested that. As far as the rentals, it was worth it because we bought four properties when the market crashed, short sales and a foreclosure. They went way up in price and are a good positive cash flow, mostly had great renters. I would not buy rentals at todayâs prices, no way. For us, it was good timing, though I really donât like dealing with any of it. Blah. But theyâre too profitable to get rid of, and they do make me feel better about diversification.</p>
<p>How realistic is living to 95 really? I know there are people who do live that long but isnât it just some tiny fraction? Like 1 in every 5,000 people or something? </p>
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<p>Inflation will eat this up though. First year you need 40K and you have 1M saved netting you 4%. Fine. Next year you need 41.2K and you have 1M saved netting you 4%, you gotta draw 1.2K from that 1M. And each year that amount you have to draw increases. </p>
<p>My parents retired in 2011 at age 44 and 46 with about 1.5-1.6M in total assets (house, cars, all cash, all financial assets). But they have no pensions or anything like that. Though itâs likely that Iâll probably live longer than they will, so Iâd want more at a slightly later retirement age. Itâs hard for me to say anything yet though. </p>
<p>The thing that strikes me most here in these discussions, no one (other than momofthreeboys) seemed to try to make an estimate of how long theyâll live in retirement and base it off that. If you donât know how long youâre gonna live how are you ever gonna figure out how much you need? Someone retired for 10 years doesnât need anywhere near as much as someone retired for 40 years. </p>
<p>@Vladenschlutteâ - Iâve thought about this & done different plans based on living to different ages. But I think it comes down to - you donât know how long you will live. Sure you can make a prediction based on actuarial tables etc. but you as an individual are not likely to hit the mean. And who wants to spend retirement hoping that they die before they run out of money? </p>
<p>We have run several calculators and most take predicted age into consideration. I usually plug in 95 for myself and DH. My parents are in their early 80s and healthy. DHs mother is late 80s and healthy although his father died in his 60s. I expect SS will become means tested so we donât count on getting what the calculators predict there. My pension (such as it is) will just about eliminate spousal SS if I work until full retirement.<br>
Health care is our biggest concern with retirement before 65. ACA coverage in our area is more expensive and worse coverage than current planâŠand what happens if ACA is overturned and you become uninsurable due to health issues? (Not being political, just adding that concern.). </p>
<p>Youâre not going to have an exact number, but should have a general idea. Youâre not going to be sitting at 60 years old expecting to live another 5 and infact live another 25. Some people are gonna live past 85, others are gonna die by 65. </p>
<p>If youâre going with the idea that you have no idea how long youâre gonna need to have enough that you can live off of interest minus inflation minus some additional risk premium. In short, youâre gonna be like Dad II, trying to amass 10M. </p>
<p>Hmmm, my husbandsâs great grandmother lived to 103. His grandma hit 96. My grandmother is currently 95 & in reasonably good health. It happens. Iâm certainly going to plan on enough to make it that far. </p>