Hello out there!
Inspired by Root of Good, Mr. Money Mustache, Physician on Fire, and others, I’m joining the club of FIRE (financial independence/retire early) bloggers. Although, given the number of excellent FIRE bloggers out there already, perhaps the world doesn’t need another.
Yet there is one area where I hope to add to the discussion: college savings and maximizing financial aid. If you have more than one child, paying for college might well end up being your largest financial commitment, aside from funding your retirement. But from my initial research, it appears that the standard advice of saving as much as you can in dedicated accounts for college funding, such as 529 plans, essentially penalizes families who do the “right” thing and diligently invest money on behalf of their children. (Consider two families with the exact same income, yet one lives paycheck to paycheck while the other saves for 18 years in a 529 plan. When it comes time to apply for financial aid, the spendthrift family is likely to be rewarded with a larger aid package than the frugal one.)
This area of exploration is one reason that I’m staying anonymous for now (and not revealing exact income and net worth amounts). When it comes time for us to apply for financial aid for our first child, I don’t want to be identified as someone advocating ways for families that might be considered affluent to increase their financial aid awards.
The goal of boosting financial aid also inspired this blog’s title, The Drive to 55, as I’ll turn 55 in the fall of 2020 and our daughter will enter college in the fall of 2023. That means we’ll be using our adjusted gross income from 2021 on her financial aid application for her freshman year. Hence, we have a huge incentive to minimize our income beginning with that tax year via retirement or moving from full-time to part-time employment.
I realize that, relative to others in this space (Mr. Money Mustache and Root of Good, for example), retiring at 55 isn’t that early. Still, I’d like to be in a position at that age to step back from full-time work or even retire completely, while also ensuring we can fund our children’s undergraduate education. So I’ll be posting here as I research our best options for positioning our assets and managing our income for both retirement and maximization of financial aid, as well as writing other more-general FIRE posts.
The Drive to 55 