Can I come back from this?

[FLA]

I became disabled approx 2 yrs ago. I make 24,500, so far half of that has been spent on medical bills this year. My ex received $950 in child support for our DD from SSDI. He wants more and is suing me for it. My lawyer said he's getting more child support now than he would've if I was still working. So he is being greedy. She said the judge may make me pay a sm amt or nothing at all. I'm not too worried about the here and now.

In June, ex will stop receiving SSDI payments as DD will have graduated from HS. We suspect he will come after me then for support (again, should be minimal) but also for college.

Here's the problem, in our separation agreement, we agreed to pay half of a State school. I thought that just meant tuition and for 4 yrs that would be 12k for my share, I could've handled that. But it also means room and board, so I will be on the hook for $40k.

I can take 20k out of Roth contributions. The other will have to come from my other IRA. I am allowed to touch retirement money because I am disabled but there will be the tax penalty.

My question is how badly does taking 40k from a 500k retirement set up affect me? I need that retirement money to last me 40 yrs.

Please don't tell me to take it all out and invest in real estate. I want to know if it will greatly affect a portfolio of index funds invested fairly aggressively (90% stock, 10% bond)

[disneysteve]

My question is how badly does taking 40k from a 500k retirement set up affect me?

How old are you? When would you need to start drawing from the retirement accounts?

Is there a reason why your kid can't live at home and commute?

[FLA]

I am 46 and hope to live on SSDI alone until age 55 at least

DD could live at home if she chooses the local State U, however she wants the college experience of not living at home. She's also applied to some Boston colleges and is hoping for a good financial aid offer. If she chooses the local school, I will have my lawyer argue that I should not be on the hook for room and board but my DD will HATE me.

[disneysteve]

I am 46 and hope to live on SSDI alone until age 55 at least

DD could live at home if she chooses the local State U, however she wants the college experience of not living at home.

I'm a HUGE supporter of children living on campus. From as young as she could understand it, we drilled into our daughter's head that she would not live at home during college. It's something my wife and I both felt very strongly about. However, if the money wasn't there, she would have lived at home. I think that's something you all need to sit down and discuss. Does your daughter know the specific details of your financial situation?

As for the retirement numbers:

500K earning 6%/year for the next 10 years will grow to about $910,000.
460K earning 6%/year for the next 10 years will grow to about $837,000.

Will that difference have a huge impact on your retirement? Probably not. It might just mean being a little more careful on the spending.

If you can continue on disability income alone for a few extra years, you can make up the difference you would have had without touching the retirement money now.

Any chance you may be able to do any work in the future, even if it's minimal? A difference of just a couple hundred dollars per month would be significant in your situation. If that isn't an option, the longer you can wait before touching the retirement money the better.

[bjl584]

I don't think a 40K withdraw will change much, all other things being equal.

I would say that you may want to force your daughter to pick a local college and commute. The "college experience" is over-rated and won't help her find a job anyways. Sounds like the money just isn't there to send her off long distance, unless she wants to apply for loans and pay for the difference herself.

[MonkeyMama]

My question is how badly does taking 40k from a 500k retirement set up affect me? I need that retirement money to last me 40 yrs.

It just depends on how little you are able to live on. Is the disability income for the rest of your life? Are you able to mostly live on that while not touching your nest egg?

{I've seen people panic initially in a situation like yours, but do very well if they aren't spending down their nest egg up front}.

& of course, the idea of having to spend $40k in your situation sounds ridiculous. DD might have to grow up and get over it. Sometimes crap happens and we don't get everything we want handed to us on a silver platter. I mean, she sounds like a typical 18yo. I am not faulting her for her feelings or opinions on the matter. But just to say this doesn't mean she will hate you forever. (When she's older she will appreciate it more probably if she isn't financially supporting you. But it will probably take some time and maturity for her to appreciate that aspect).

[FLA]

our separation agreement specifies that I will pay room and board and the lawyer said that stands even if she picks the local school. But I could appeal to the judge. Maybe she'd have to take out loans if she wants the whole on campus experience. I do want that for her.

disneysteve, thanks for running the numbers for me

I do have 13k stashed in an emergency fund, I'll probably use 10k of that to pay for the first year, unless medical expenses don't go down.

as for work, I fall a lot. I just had a disability review with my doc today. Because of the falls, poor memory and concentration, she doesn't see me working for a long time yet. I still have no audible BP and my pulse is flying. She just doesn't think it's safe. I was thinking maybe I could take dogs in under the table. We have a huge yard but I don't know how my abused shelter dog would react to a third dog. Plus, my mother would be very much less than thrilled. I'm trying to think of something.

[Petunia 100]

I am 46 and hope to live on SSDI alone until age 55 at least

DD could live at home if she chooses the local State U, however she wants the college experience of not living at home. She's also applied to some Boston colleges and is hoping for a good financial aid offer. If she chooses the local school, I will have my lawyer argue that I should not be on the hook for room and board but my DD will HATE me.

Your daughter sounds a bit entitled. Sit down with her and explain your circumstances. 500k sounds like a lot of money, but when you don't have the ability to earn more, it isn't as much as it seems.

Plenty of people don't live on campus and somehow find a way to both survive and not hate their parents.

[Petunia 100]

our separation agreement specifies that I will pay room and board and the lawyer said that stands even if she picks the local school. But I could appeal to the judge. Maybe she'd have to take out loans if she wants the whole on campus experience. I do want that for her.

disneysteve, thanks for running the numbers for me

I do have 13k stashed in an emergency fund, I'll probably use 10k of that to pay for the first year, unless medical expenses don't go down.

as for work, I fall a lot. I just had a disability review with my doc today. Because of the falls, poor memory and concentration, she doesn't see me working for a long time yet. I still have no audible BP and my pulse is flying. She just doesn't think it's safe. I was thinking maybe I could take dogs in under the table. We have a huge yard but I don't know how my abused shelter dog would react to a third dog. Plus, my mother would be very much less than thrilled. I'm trying to think of something.

Yes, that is one way to cheat. Please reconsider whether doing something dishonest is really the best way to go.

[breathemusic]

If your daughter is going to get mad at your for not paying money for something that you really can't afford that is a LUXURY then she needs a good world lesson in how finances work anyway. Plenty of kids get ZERO help from their parents to pay for college, so if she really wants the college experience, it won't kill her to take out a few loans if she's smart about it. I know people on this site often get ultra conservative and say things like "postpone school and save money until you can pay cash" or even just that she should live at home, or pretty much anything to avoid loans.... but a reasonable amount of loans aren't actually that bad depending on the type of career she's interested in. $150k in loans for a job that pays $4k a year... now that's a bad decision.

I'd contest in court that the college expense is a luxury and you just can't afford it. I would think that a judge would understand that and work with you rather than expecting you to go into debt yourself or liquidate your retirement.

[FLA]

If your daughter is going to get mad at your for not paying money for something that you really can't afford that is a LUXURY then she needs a good world lesson in how finances work anyway. Plenty of kids get ZERO help from their parents to pay for college, so if she really wants the college experience, it won't kill her to take out a few loans if she's smart about it. I know people on this site often get ultra conservative and say things like "postpone school and save money until you can pay cash" or even just that she should live at home, or pretty much anything to avoid loans.... but a reasonable amount of loans aren't actually that bad depending on the type of career she's interested in. $150k in loans for a job that pays $4k a year... now that's a bad decision.

I'd contest in court that the college expense is a luxury and you just can't afford it. I would think that a judge would understand that and work with you rather than expecting you to go into debt yourself or liquidate your retirement.

this would all be true and fine and easily done except I am obligated to the separation agreement that says we will split the costs (tuition and room/board) of a State school. Me getting disabled doesn't change my obligation because in the court's eyes, I should have been saving for college since day 1. That way disability wouldn't have affected the college fund. I did have 24k in a fund that was earmarked for college but it was needed for medical expenses. I agreed to the separation agreement and am bound by it unless a court chooses to act differently.

I agree college is a luxury now and she should have to take loans. When I signed the sep agreement, she was 3 and her father is 15 yrs older than me. My lawyer and I were afraid he'd retire during the college years and say he couldn't possibly afford college, leaving DD with lots of loans. So we agreed to the 50/50 deal, which would've been no problem on our two incomes. So I made my own bed. I never anticipated a disability.

[LivingAlmostLarge]

Okay here's the reality. When you wrote the divorce decree you were working. You aren't now. That in my books says you need to renegotiate. I do feel badly because it was promised to the kids and not the ex. But your health situation and disability DID happen and you DID NOT cause it.

Now if you can't renegotiate, I think that only agreeing to the cost of public school and room and board ($40k) is okay.

What I would do? Besides applying for a TON of financial aid. Are you ABSOLUTELY sure she won't qualify because of your disability? No income = money for school usually. Under $60k family income and it's free to go to many schools. Are you sure you won't qualify for need based aid?

I would consider borrowing the college costs. Why? Because who knows if things will pan out. I would I'm sorry tie it to grades. If she fails or doesn't take it seriously then you stop paying. You can ask the lawyer if it's fair to put the loans in her name or if it has to be in yours. IF she changes majors then no way do you pay for more than 4 years. If she drops classes causing a delay in graduation again no way are you on the hook.

I think that you need to tell her this up front and explain the situation about disability, savings, and what you can afford.

I don't think you can personally afford the $40k. You have a limited potential to earn, you are on disability, and you could potentially need all your money. This is reality and not you trying to get out of paying for college.

Maybe others will say borrowing is a bad idea, but if she doesn't take it seriously and blows off college then you'd be on the hook only for 1 year instead of 4.

I'd be more worried about liability. That if the dog you were watching bite someone accidentally then it was found you were getting paid to watch the dog instead of doing a friend a favor it'd be a bad situation to be in. If you do dog watching professionally I'd guess you'd need to buy umbrella and special liability insurance as a bonded worker.

[FLA]

Yes, that is one way to cheat. Please reconsider whether doing something dishonest is really the best way to go.

you are right and if I did it under the table, homeowner's insurance wouldn't cover any problems that could arise. Not a good idea.

[FLA]

Now if you can't renegotiate, I think that only agreeing to the cost of public school and room and board ($40k) is okay.

What I would do? Besides applying for a TON of financial aid. Are you ABSOLUTELY sure she won't qualify because of your disability? No income = money for school usually. Under $60k family income and it's free to go to many schools. Are you sure you won't qualify for need based aid?

the Financial Aid Form only looks at the income of the parent she is living with, which is her dad. He makes around 90k. She would get a free ride if she lived with me. She went to live with her dad when I got sick (my terminally ill mother also lives here) and she just couldn't take all the sickness. I tried to explain that if she just spent the nights here she would get so much more financial aid, especially from the Boston private schools she wants. But she has pretty much free reign at dad's, few rules, no chores and he bought her a car. So coming back here is not a choice she will be making.

DD sounds spoiled (and she totally is by her dad) but she's only trying to get what she thought she was getting her whole life. That's why she plans on a State school so she can save loans for grad school. I made a not fully thought out decision when I agreed to the terms of the separation agreement but my ex was so mean, I totally believed he would retire during the kids' college years and leave them hanging.
yeah, the dog thing was not well thought out

[snafu]

off topic...

I too believe your change of circumstances opens the door to re-negotiate the initial agreement. 2nd. DD could take some responsibility to amass funds for University. She can begin researching student aid streams, scholarships, grants, bursaries, waivers, in-kind [books/equipment] and any free, on-line courses. While not practical for 1st year, 3rd & 4th year students often build on summer jobs to work PT in their future field.

There is no rule that requires student to move straight from HS to university. It might be helpful for daughter to work over summer and possibly until the following intake September 2018. The true benefits are the opportunities to mature and understand how the 'world turns.'

Option 3. Daughter could take 'General Studies' at a 2 year college, fully transferable to a 4 year, university program. Finally, she could live at home the final two years or initial two years. I too think campus living is not as imagined.