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  • FIRST POST
    • ams25
    • By ams25 3rd Oct 17, 9:32 PM
    • 102Posts
    • 87Thanks
    ams25
    Early Retirement.... with Young Children. Does this feel reasonable?
    • #1
    • 3rd Oct 17, 9:32 PM
    Early Retirement.... with Young Children. Does this feel reasonable? 3rd Oct 17 at 9:32 PM
    I read lots here about people waiting until the children have finished university before they feel its safe to retire/stop full time work. My situation is different.

    I had children relatively late (early/mid 40s) and I have stopped working (at 52) - with 2 primary school age children (6+10). I might be getting the SP just as my youngest is finishing uni (if he goes)!. The upside of this (unplanned) approach is that i was able to save more when younger (no kids) and those savings have had the benefit of the magic of compounding... plus I now get to enjoy more time with the kids while relatively young.

    While I think I have the financial cover to maintain our current standard of living including the cost of the children, I have to admit its an area where I may not have everything fully covered - so would value the view of the board on this in case I am missing some major cost factor.

    My tracking of expenses over the past couple of years is that the children (both) are adding around £13k pa to our budget, which seems consistent with some of the "costs of raising a child" articles you see. We spend more on the kids than we do on ourselves and given some folk are looking to retire on this or not much more, it feels like a decent amount. We have no childcare costs - as i am around for that and not looking at private schools, so this covers clothes, toys/gifts, school and after school activities, food, holidays, eating/going out, kids parties etc. We live in London so everything is expensive
    My expectation is that this will increase as they get older, but unsure how much. c.15% is my expectation but I am guessing as have not had older kids! (some things should be cheaper too... less on toys.. more on food, going out?)

    When it comes to university, if they want to go, good chance the situation will have changed 8-10 years from now, but I have assumed I would need c.£40-50k each in todays money to support tuition fees and living costs for 3 years. I know the Martin Lewis advice is not to pay the tuition fees upfront, but provide support with the repayments if required later, but would aim to be covered either way. Help with house deposits etc might potentially come from downsizing our current home when the kids are older so not worrying about that for now.

    My question is do you think I have realistic expectations of the ongoing costs for the children or am I missing something.

    Thanks.
    Last edited by ams25; 03-10-2017 at 9:34 PM.
Page 2
    • bigadaj
    • By bigadaj 7th Oct 17, 2:44 PM
    • 10,803 Posts
    • 7,100 Thanks
    bigadaj
    It is specualtion, as those who pay the higher rate only graduated a few years ago and thos graduating int he future. None of them have been working long enough to say if they will pay if off or not.

    My point was, and remains, mine WOULD have to pay it all plus the 6%+ interest.
    Originally posted by atush
    Well surprisingly it's not all about you, or your kids.

    People need to base their decision on their own circumstances and current knowledge and best guess of any future changes, the default solution however is what is the best option for the majority.
    • michaels
    • By michaels 7th Oct 17, 11:53 PM
    • 19,951 Posts
    • 91,519 Thanks
    michaels
    It is specualtion, as those who pay the higher rate only graduated a few years ago and thos graduating int he future. None of them have been working long enough to say if they will pay if off or not.

    My point was, and remains, mine WOULD have to pay it all plus the 6%+ interest.
    Originally posted by atush
    I suspect that the top 30% and bottom 50% will have a pretty good idea that they will and won't pay it off based on degree and uni choice. Some in the middle won't be sure and a few at the top who might have paid it off won't as they choose more socially beneficial work that pays less
    Cool heads and compromise
    • TheTracker
    • By TheTracker 8th Oct 17, 2:49 PM
    • 1,132 Posts
    • 1,121 Thanks
    TheTracker
    OP, I’m in a similar situation to you, albeit still in my 40s, having kids in 40s, and plan to retire sometime around 52, with kids similar in age to yours. It was 50 before kids Not much to add to the advice given though. Depends on whether you’ll pay for your kids higher education, and if so whether you do it upfront. Then you have all the residual concerns of helping with house deposits, cars, travel to see you, etc. Sure, every parent has those concerns, but at least for me I feel they are more focused while I’m retiring with them in formative years. All these concerns are highly personal and what matters is knowing what will cost what, and sounds like you have that in check.
    • atush
    • By atush 8th Oct 17, 3:55 PM
    • 16,386 Posts
    • 10,139 Thanks
    atush
    Well surprisingly it's not all about you, or your kids.

    People need to base their decision on their own circumstances and current knowledge and best guess of any future changes, the default solution however is what is the best option for the majority.
    Originally posted by bigadaj
    It isnt about me or you or whoever.

    But the higher interest only started for recent graduates, therefore there are no studies that will tell you who pays and who doesnt. All I can tell you is, from my experience of 3 recent graduates (and all their friends) is that they all would have had to pay full whack incl interest so making debts of 45K into 80K+ etc.

    People need to base their decisons on their own circumstances, the information of those who have graduatd recently- not those who paid 1-3% for their student loans x years ago.

    With the BOE due to increase interest rates, we can only assume the interest rates for student debt will climb further.
    • atush
    • By atush 8th Oct 17, 4:03 PM
    • 16,386 Posts
    • 10,139 Thanks
    atush
    OP, I’m in a similar situation to you, albeit still in my 40s, having kids in 40s, and plan to retire sometime around 52, with kids similar in age to yours. It was 50 before kids Not much to add to the advice given though. Depends on whether you’ll pay for your kids higher education, and if so whether you do it upfront. Then you have all the residual concerns of helping with house deposits, cars, travel to see you, etc. Sure, every parent has those concerns, but at least for me I feel they are more focused while I’m retiring with them in formative years. All these concerns are highly personal and what matters is knowing what will cost what, and sounds like you have that in check.
    Originally posted by TheTracker
    A lot of people overconcern their selves with helping with house deposits- over a 50K student debt at a high rate.

    I figured to give them a clean slate of no debt, DLs as pad for them to learn and a car (to share) and overseas and local travel up to when they move out. So they stay at home a year or two and leave with thousands in the bank- for a move, a deposit, a new car etc. They dont really need my help.

    That isnt to say I wont help with house deposit later (or funds for closing renovation etc). I w ill if I have it.

    i chose to pay, so mine would aoy such high interest and have debt hangin over them. So they are free do make choicees that would be harder otherwise.

    And this i find kind of insulting

    "Some in the middle won't be sure and a few at the top who might have paid it off won't as they choose more socially beneficial work that pays less ".

    Sure, if you have rich parents you might make that choice, or if you dont live in a big expensive city etc. But a little insulting to young people trying to make it on their own. Being socially beneficial isnt always a choice some can make.
    Last edited by atush; 08-10-2017 at 4:06 PM.
    • TheTracker
    • By TheTracker 8th Oct 17, 4:26 PM
    • 1,132 Posts
    • 1,121 Thanks
    TheTracker
    A lot of people overconcern their selves with helping with house deposits- over a 50K student debt at a high rate.

    I figured to give them a clean slate of no debt, DLs as pad for them to learn and a car (to share) and overseas and local travel up to when they move out. So they stay at home a year or two and leave with thousands in the bank- for a move, a deposit, a new car etc. They dont really need my help.

    That isnt to say I wont help with house deposit later (or funds for closing renovation etc). I w ill if I have it.

    i chose to pay, so mine would aoy such high interest and have debt hangin over them. So they are free do make choicees that would be harder otherwise.
    Originally posted by atush
    Yes this is a good point and Iíve argued with myself over it. Behavioural economic psychology is fascinating. Iím very much against student fees, politically. And very much for youngsters surviving of their own means. So itís a battle of whether I neutralise politics I disagree with or let them swim in a world that is inevitably informed by political economic decisions. Time will tell.
    • atush
    • By atush 8th Oct 17, 4:36 PM
    • 16,386 Posts
    • 10,139 Thanks
    atush
    Politics and you are for you to decide. I base mine not on what I had (I paid for US college in the USA along with my parents- no handouts and my OH got a free Uni education incl grants) but on the situation today- which is all I have direct control over.

    So in effect, rather than have to pay back student loans (whci unlike most here I had to do at high interest) to put them into the situation that their father had- to leave Uni with no debt, a DL and use of a car, and a place to live (where they pay a small rent but can save laods to move out).

    It is fine to beleive like JC that Uni education should be free- but someone has to pay for it (like i did). Be it through higher taxes, lower govt provision elsewhere.

    It was a labour govt which decided everyone and their brother shold go to Uni, without thinking aobut if many of those degrees would provide well paid employment. I believe they also came u with the idea of student fees too.

    Many here espousing the student debt route never actually had to pay it, and never had to pay high rates of interest either (mine was 9% if I remember correctly).
    • coyrls
    • By coyrls 8th Oct 17, 7:53 PM
    • 922 Posts
    • 967 Thanks
    coyrls
    It isnt about me or you or whoever.

    But the higher interest only started for recent graduates, therefore there are no studies that will tell you who pays and who doesnt. All I can tell you is, from my experience of 3 recent graduates (and all their friends) is that they all would have had to pay full whack incl interest so making debts of 45K into 80K+ etc.

    People need to base their decisons on their own circumstances, the information of those who have graduatd recently- not those who paid 1-3% for their student loans x years ago.

    With the BOE due to increase interest rates, we can only assume the interest rates for student debt will climb further.
    Originally posted by atush
    I donít understand how you can be confident that the recent graduates you refer to will definitely pay back all their loans or that your children would have paid back all their loans, if they had taken them. In order to know that the loans would be paid off, you would need to know what they are going to earn over the next 30 or so years, which you canít possibly know. You can make guesses about what they will earn but you really canít know.
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