Name:
John & Debbie
Age:
45 and 45
Profession:
Teacher and Nurse
Primary Goal:
Help strategize a plan to pay for schooling for their child, Stephanie, who is currently a junior in high school.
John & Debbie have each been working at their same employer for the last 10 years. They have saved for college & retirement, but are unfamiliar with the process as Stephanie plans to attend a 4 year college and would like to know how much a 4 year education will cost them.
They have retirement accounts through their employer and a 529 college savings plan for both their children.
They are very active in Stephanie’s activities and have been planning to understand the college process better, but have never found the time. They currently have a mortgage and minimal consumer debt. They would like to help cover as much as reasonably possible to pay for her education costs.
The Challenge
Stephanie is a very talented and well-rounded student. She has discussed plans to go into elementary education, but is not 100% sure if she will continue along that track. They are daunted by the challenge of finding a college that will set Stephanie up for success and doing so in a way that they will be able to manage the payments.
They also wondered:
- What type of financial aid is available?
- How much should they have in their college savings account for Stephanie?
- What should be the priority, college or retirement savings?
- What if Stephanie decides to change her major or pursue a different career track?
- How do we pay for schooling if parents/grandparents want to help?
John & Debbie both worked with a financial representative who helped set up the college accounts years ago, but do not have a professional who can help provide advice, planning, and peace of mind.
The Approach
The first step for John & Debbie was to meet with an advisor who understood the challenges they both faced with a busy schedule managing and fluctuating work hours. Once they supplied the advisor with the necessary documentation, they had a better understanding of how much they would be expected to pay per year for Stephanie’s schooling.
The Result
After initial discussions and a series of meetings with the advisor, both John & Debbie:
- Understood better how the financial aid process worked, and a rough estimate of much they would be expected to pay for college.
- Developed a strategy to fund four years of schooling for Stephanie without taking on exorbitant student loans.
- Were able to coordinate a plan with John’s parents, who have also saved for Stephanie, that wouldn’t negatively affect the financial aid process.
- Better understood the tax credits available to them and how they can properly save into their college accounts while decreasing their taxable liability.
- Kept on track for a retirement date that doesn’t push them past their intended goal by underfunding how much they are able to save year to year.
- Better understood the school choices Stephanie had discussed with them and which schools would offer the best education for the cost.
As a result of the planning they were able to do prior to Stephanie going off to school, they were better able to enjoy the process of helping Stephanie plan for her future.