Ask the grumpies: Could you revisit 529 plans?

Minnesotan asks:

Can you please discuss 529 plans again? Do you still have your kids in Utah’s plan? My state now has “parity” and will give some income tax deduction for donations to any state plan (still need to read more on this). Should I go with Utah, or is another state the best option now?

Disclaimer:  We are not financial professionals.  Please consult an actual financial professional and/or do your own research before making important financial decisions.

Ooh, great question, and great benefit.  Let’s take a look at this parity thing…

From savingforcollege.com:

Minnesota taxpayers now have the option of claiming either a tax credit or deduction for contributions to any state’s 529 plan…

Deduction:  Up to $3,000 for a married couple filing jointly or $1,500 for all other filers for contributions made to a qualified 529 account…

Credit:  Credit can be claimed on half of contributions up to $500, subject to phase-out starting at a federal adjusted gross income of $75,000…

Calculator for which is better In 99 percent of cases, however, they’re going to be better off using the credit if they’re under the $100,000 income threshold…it’s safe to assume above and below the $75,000 and $100,000 income levels that they should take the credit or deduction, respectively.

So that’s cool.  The question then becomes, what state’s 529 plan should you use.  It seems like the answer should be the same as for people who don’t get any state income tax deduction from being in a 529 plan.  And for that, you want places with (1) low fees, (2) reasonable investment options, (3) reasonable customer service… and probably in that order.

Let’s see what the big financial sites are saying now.

Forbes:  Rates Maine, Nevada, and Utah as best options.  (They also like Alaska, but note it has higher fees.)

Investopedia:  Ohio, Utah, Illinois, Virginia, New York

Morningstar:  Illinois, Virginia, Utah, California, though they intend to put out new numbers using a new methodology sometime in October that emphasize fees more.  You will probably want to check this out before making any major changes/investments.

Kiplinger:  Utah

So… to answer your question, yes our kids are still in the Utah plan.  Although some years another plan may match or even beat Utah’s fees, those plans don’t tend to consistently have the lowest fees.  Although Utah doesn’t always have the lowest fees every single year anymore, it has always been competitive for non-resident plans every time I’ve looked.  That consistency over time is why I don’t regret picking Utah and sticking with it given that we don’t get a tax break only from using our own state’s plan.  Past performance doesn’t predict future performance, but there is something to be said for having a steady track record with fees over time.  You’ll probably also want to take a look at Illinois and Virginia and maybe some of the other states listed above and see what you think.

Grumpy Nation, if applicable, what state is your 529 plan from?

I guess I’m not going to front-load DC2’s 529?

I’d been waiting for our emergency fund to refill after all of the big expenses we had had.  (March has been so long that I don’t even remember what the last big thing was… I mean, I know we hired a handyman to fix some stuff because I haven’t finished that post yet, and I know we bought a car this summer, paid for lots of summer travel and camps that probably won’t happen now, maybe it was front-loading DC1’s 529… probably that.  Bad market timing there, eh?  Shoulda kept dollar cost averaging!)  Since our tax bill and estimated taxes ended up being a wash again this year, we’re back to having more money than we need for the long unpaid summer.

I still don’t know how much college is going to cost for DH’s relative’s kid next year.  They weren’t clear about if the number given was just for summer semester (which they mistakenly put down as the first semester of attendance) or the full year or what.  They also didn’t know if that number included loans etc. etc. etc.  So they were going to move his start to the Fall with everyone else and then get the page with the full work-up of the costs to us.  That hasn’t happened yet because the ‘Rona shut the university down and so on.

In any case, I’m hoping he’s still planning to go in the fall [update:  currently unlikely– he’s moved out and may not finish high school] and I’m thinking that selling stocks is not such a great idea right now, even if they’re only down to 2017 levels.  So instead I’ll keep stockpiling in cash.  There seems much less of a reason now to try to figure out where to put money.  I can’t predict the future, but I somehow doubt we’re in a temporary market low that will immediately zoom back up making me regret not having invested more than our usual right now.

Potentially excess money can sit a while in savings until we find out whether or not it will all be turned into tuition next year or regular spending if DH gets laid off.  We can re-evaluate on frontloading DC2’s 529 in the future, and in the mean-time we will continue to put $750/month in there.

All the good personal finance bloggers out there will say stay the course, and we are… I’m not dropping 403b/457/regular 529 investing.  But I’m also not looking at this as a huge opportunity to get in the market.  Who knows how long the recession will last.  Maybe things will bounce back after a vaccine is out.  But maybe all the things that the Trump administration did to hurt the economy will be exposed and it will be a while before we dig out of this one, just like with W’s recession.

Are you changing any money plans because of the pandemic/upcoming recession?

 

Should I put lump sums in the 529 instead of dollar cost averaging?

One of the reasons this blog seems to have become a spendapalooza is that there’s really not any obvious place for extra money to go.

But there actually is one place for extra money to go– the kids’ 529 plans.  (A 529 plan is an awesome way to save for college or vocational school such that the earnings are tax-free.  But, it’s a good idea to max out your retirement before setting money aside in 529 plans because retirement accounts aren’t included in college financial aid calculations and you can take out loans for college but you can’t for retirement.)

In the past, I’ve always said, “and the kids’ 529s are on track to pay for the school of their choice [by the time the graduate college].”  What I mean by that is that we’ve been putting away $750/month in the accounts, even in the summers when I don’t get paid.  (It used to be $500/month, but we increased it when we paid off the mortgage and stopped paying for daycare.)  But we haven’t *actually* put enough money to be able to cash flow the remainder of the cost of (a four-year private) college yet.  We’re just on track to.

Over the next 4 years before DC1 starts college, $750/mo works out to $36,000 (actually a little less than that since it’s November, but it’s an estimate).  Over the next 8 years before DC1 ends college, it would be $72,000.  (That’s a LOT of money!)

We could just put in $36K (instead of $9,000) over the course of this year and then either start contributing again once we know where DC1 is going to college or not based on the cost of hir chosen school.  (Given hir struggles in English, it is likely that HMC is out, but also out with HMC is its insanely high $72K/year tuition.  I told DC1 we could get hir a unicycle anyway.)

Doing it this way loses some dollar-cost averaging benefits, but it gains the benefits of a longer period of untaxed earnings.

There are some wrinkles to doing BIG 529 account transfers.

The first is that even though the account is a custody account and doesn’t actually belong to the child, it still is subject to the annual gift tax.  For 2019, the amount that can be given annually without tax is $15,000.  Each parent can give that amount, so a married couple can give $30,000 in one year.  $36K is more than $30K, but there’s a loophole with the 529.

This wrinkle has its own wrinkle:  An individual or couple can give a larger lump sum, so long as the total given in that five year period is still less than 5 times the annual exclusion.  So DH and I *could* give $150K this year so long as we didn’t contribute again for another 5 years.  (Of course, that’s a moot point because we don’t actually *have* $150K to give, but you get the idea.)  That means when DC1 actually gets into college, we should be able to continue to contribute to hir 529 without penalty.

So our plan is to do a lump sum of $36K this month to DC1’s account (this gets rid of all our excess cash and digs pretty deep into our emergency fund, but the emergency fund doesn’t actually have to be full until May since we can cash flow most emergencies when we’re both being paid).  Then we will stop contributions to hir account entirely.  We will continue as normal with DC2’s account (contributing $750/month) until we build up excess cash and I start to feel like forcing DH to buy all the Apple products again.  At that point we will re-evaluate and decide whether we want to do a lump sum to DC2’s account or if we just want to increase the monthly contribution.  I’m sure I will post about what we end up doing.

In ~4 years when we know where DC1 is going to college, then we’ll decide whether or not to start contributing to that 529 plan again, and we will have a better idea about how much DC2’s account can bear without going over.

Grumpy Nation, I don’t have a good question for this post.

Ask the grumpies: How to save for multiple kids’ 529s?

First Gen American asks:

Once our mortgage is done again, we’ll swap that out with a 529 auto deposit option that comes out of both paychecks….which brings me to another question…Should we funnel a ton now into older kid and worry about younger kid later (he’s 4 years younger) or should we fund both at the same time now? I’m assuming we can roll over older kid’s excess into younger kid if we over deposit but then if we die before kids do, an uneven distribution would screw things up for kid 2. Not sure what to do yet.

I have also spent some time thinking about this.  I am not sure it actually matters that much.

Yes, if you have too much money for kid #1, you can easily transfer the leftover amount to the second child.  (An added wrinkle–if you undersave for DC1, will you take from DC2’s account?  You can, but would you be willing to?)

A quick check on the internet suggests that the 529 does not automatically go to the child who is named on its behalf– you can name a beneficiary.  It is also something that you can talk about with an attorney for a trust if you do not have a successor that you trust not to just liquidate it at a loss.

We have target-date accounts for our children in their 529s, so it makes sense in terms of risk to fund them separately.  That means DC1’s account has less risk in it right now (a larger bond to stock ratio) than DC2’s does because DC1 is closer to college.  But I’m thinking of them as separate buckets and we’re aiming to fully fund 4 years at a private school given that we’re not expecting much financial aid.

If you’re not thinking of them as separate buckets, then you might want to think of it as if you are going to “retire” and you know you’re going to be alive for 8 years after “retirement” and then suddenly “die” (if you’re planning on funding post-college education, or your DCs might take more than 4 years to graduate, then you might want to add some years to that).  What kind of investment portfolio would be optimal in that scenario?  It’s going to depend on your risk aversion, but you probably could pick a single fund that would fit your risk preferences given that scenario.

In terms of how we’re funding, I don’t actually think that our method of putting in $X/month to each child’s fund is necessarily optimal.  It would make better sense while we have excess cash to put in lump sums right now and stop contributing later (allowing for more tax preferred earnings).  But $X/month/kid is predictable and is easy to fiddle with should our situation change.

The important thing that gets brought up in the comments when we talk about this kind of situation is the perceived fairness of the situation by the kids.  Pick some rule that seems fair for both kids and stick to it.  If you have to make adjustments, make sure that you adjust for the other kid as well.  For us, we’ve decided that fully funding tuition without loans is what we consider fair, so we will be ignoring the actual costs and financial aid for the schools.  Our kids will get college paid for by us no matter what college they choose.  Other people choose a specific dollar amount (though I hope they adjust it for inflation!), or may have a rule like, “we will pay up to the cost of state school X”.  What you don’t want to do is pay full freight for one kid and force the other to take out loans for the full amount because that can lead to them writing about how you don’t love them on money forums, and nobody wants that.

Grumpeteers– How do you think First Gen should save for two kids’ college?

529 plans and astonishment at compounding

Club thrifty had a post recently about funding her kids’ college education, which caused me to take a look at how my kids’ 529 plans are doing.  We’ve been putting in $500/mo since each of them was born.  At the time of writing this (though not the time of posting), DC1 is 7.5 years old.

So if we’d just put $500/mo away in our mattress, we’d have $45,000.  That’s a lot of money, and would currently fund in-state tuition for four years at many state schools without any aid.

That’s not how much my 7.5 year old has in hir 529.  How much is in there, do you ask?  $69,874.56.

Let me say that again.

$69,874.56

That means the stock market and compounding has added something like $25,000!

~$25,000 just because we put $500/mo in the stock market instead of in a mattress (or instead of spending it!)

Doing this exercise has given me a few scattered thoughts.

1.  Compound interest from stocks over a long period of time is AMAZING. It’s just in one of the Vanguard target date funds from the Utah system, so we’re really just matching the market with a little bit of adjusting to bonds as ze gets older.

2.  This kind of thing is how the rich get richer.  The best truly passive income is reaping profits from the sweat of the proletariat.   Rent-seeking is where it’s at.  Getting those returns to capital.  The poor get poorer by comparison because they have to spend their money to live and can’t have their money make money.  It’s terrible.  At the same time, as a member of the upper middle class, it’s something we need to do to keep from sliding down the income/wealth scale.  Because if you only have a choice between rich and poor, it’s better to be rich.  We need major political change in this country.  Yes, charitable donations are nice, but the entire system needs a new Great Society overhaul.

3.  Sacrificing early and starting early with savings is the way to go.  We never really felt the $500/mo cut to our income because it coincided with our employment.  We made our decisions based on a smaller income.  When you get a new job, if you can max out your retirement funding before you get used to the higher paycheck, that’s definitely the way to go.  (Of course, high interest debt is also worth paying off– the trick is not to get used to a higher level of spending that you then cut down.)

4.  I don’t think it’s time to stop contributing yet.  We suspect DC1 will end up going to a private school (or, less likely, an out of state public that costs just as much).  Right now with both of us employed we’re in the middle area of whether or not we’d be considered for any financial aid at all, and there’s that hope that by the time DC1 gets to college we’ll be in the “no financial aid based on income alone” bracket (we can dream, right?).  If not, we still have time between our two kids to adjust based on what kind of aid the eldest gets or doesn’t get.  If DC1 gets aid, then we simply stop contributing to DC2’s plan at that point.

5.  Because of the way that financial aid is calculated, most people should max out their retirement savings before contributing to a 529.  We’re doing that now, but we weren’t doing that this entire time because we had *too* much room for retirement and didn’t realize that DH would be getting a better job that paid more, so we didn’t put away all 72K/year that we could have, figuring we’d need some of that money to pay for college! [Note:  For those who haven’t been following our finances for the past few years, DH no longer works for the government so we can no longer put away anywhere near 72K for retirement because he no longer has a 457 option or a second 403b option, just a really lousy 401K with high fees and a lousy match.]  Yes, you can withdraw ROTH contributions to pay for college, but it would probably not be enough.  The 529 is still a much better place for your child’s money than a savings account in your child’s name, for financial aid purposes.  That’s because the 529 in your name counts as your savings whereas any savings in your child’s name is expected to go 100% to college, which cuts down financial aid from the school.

6.  Regular savings that you don’t miss because you’re used to that money not hitting your checking account really add up.  However, if you can’t afford auto-deducting any of your paycheck (though automatic retirement savings should be a priority), 529s are a great place for monetary gifts for your kids to go.  A little bit early on really does go a long way.

What are your thoughts on retirement and 529s and compounding stealth saving?  Also, how often do you look at your accounts?

A post for Ana on 529 plans

We were poking around on medical moms blogs when we came across this comment from reader Ana. She said she wanted to just be told what to do with 529 plans because she’d hit the paradox of choice and everything was all complicated.

The post was almost a month old so  we felt silly for replying to it there, so we figured we’d reply to it here and hope that Ana saw it.

Also:  a disclaimer.  We’re not financial advisers.  Take our “advice” such as it is at your own risk.

Step 1:  Check to see if you live in one of these states that offer tax breaks for 529 contributions.

1a.  If you do, then go with your state’s 529 plan.

1b.  If you don’t, then go with Utah.  There are some other 529 plans that are now just as good as Utah’s but Utah’s has always been ranked among the top and we hope will continue to be ranked so.

Step 2:  Pick a plan company within the plan.

2a.  If Vanguard is one of your options, go with that.

2b.  If not, then look at the fees.  Pick one with low fees.

Step 3:  Pick a fund from your choices.

3a.  You want to look for terms “age-based”, “life-cycle” or “target-date”.

3b.  If there are multiple choices among these options, then it doesn’t really matter which one you pick.  They’ll be different in terms of risk and possibly fees.  You’ll again want to focus on the lowest fee plan first.  If your kids are little, more risk is better, if they’re closer to college, less risk is fine.  Don’t worry about the risk if you can’t decide– flip a coin or something.  It’s better to pick something randomly than to pick nothing at all because you’re worried about getting the “best”.

So, if you’re in a state that doesn’t give a tax advantage, you want the Utah UESP Vanguard Age-Based Aggressive Global fund.  And you’re done.  If you’re in another state we’d be happy to poke at their options for you.

Put in what you can.  We like putting some away automatically each month.  Something is better than nothing.

Are you saving for your kids’ college?  How?

August Mortgage Update and ponderings on 529 plans

Last month (July):

Balance: $102,221.27
Years left: 8.666666667
P = $798.18, I =$416.22, Escrow = 621.66

This month (August):

Balance: $100,747.56
Years left: 8.5
P = $803.97, I =$410.44, Escrow = 621.66

One month’s savings from prepayment:  $2.62

Hopefully by this time there’s a new addition to the family!  If not, I hope ze comes out soon.

In any case… For DC 1 we’ve been putting away $500/month every month since ze was born.  Ze has a pretty sizable kitty now, and is on track to be able to pay for the private school of hir choice should we keep this up (depending on the calculator we use and the assumptions we make).  We’re hoping to be making enough money that we don’t qualify for financial aid.

The question is:  What should we do for DC 2?  We could do the same thing, ignoring inflation, and start putting away another $500/month.  Then DC2 will also be on track, give or take, to pay for the private school of hir choice come college time.

The problem:  What if DC1 decides to go some place that doesn’t cost hundreds of thousands of dollars?  What if ze gets huge amounts of merit aid*?  What if I move to a university that pays tuition costs?  Basically, what if ze doesn’t liquidate hir 529 for school?  Then we’ll want to be able to transfer it directly to DC2 (since we don’t really believe in paying for graduate school as much as we believe in paying for college), but if DC2’s 529 plan is also pretty full we might end up with more money in 529s than we actually need.  We would then have to transfer it to some other relative, pay for our own kids’ graduate school, or take the money out at a penalty (in which case, why use the 529 in the first place?).  None of those options are appealing.

However, there are several years between DC1 and DC2, so in theory if we saw DC1 costing less than predicted, we probably could just stop putting money away to DC2’s plan at that point.  Right now putting $500/month away probably isn’t going to put us in any danger of oversaving in 529 plans.  We, of course, may have to readjust once our work situation changes.

So I guess that’s what we’re gonna do.  Put $500/month for each kid until we have some reason not to.  After all, it’s the early savings that are going to benefit the most from the tax advantage since they’ll have more time to generate earnings.

*Currently it looks like there’s a way to take money out without penalty up to the amount of a merit scholarship, but there’s no guarantee that will still be the case in the future.

Link Love

Have you voted?  We’re planning on voting after doing door hangers this morning.  One of my RAs said it was 20 min wait to vote on campus (which is normal), but one of my friends said there was a LONG line at the utility center where we normally vote– that place is usually deserted!

Today is also the BIG SEND day for votefwd.  So we’ll be dropping those envelopes off at the post office today.  I’m guessing they’ll have addresses up for a few more days, so check!

And… just because we’re all super focused on the election, doesn’t mean we should ignore what is going on in congress right now.  I know a lot of people are feeling defeated about the Supreme Court thing, but we should still protest it.  First off, only two R senators need to flip.  Second, if there’s a groundswell of support Dem senators can say, see, this is what my people want, and Rep senators can feel nervous about their choices.  Third, if we make this difficult for them, especially during an election year, then they are less likely to do more horrible stuff… if we are complacent they will ram through as much horribleness as they can as quickly as possible.  Protesting now delays whatever the next awful fascist thing is.  Also there is a very important Supreme Court case coming up… if you want to keep the pre-existing conditions exclusion, we need to delay Barrett’s confirmation at least that long.

This whole thread is very good.  Make noise.  Note especially the discussion about Covid as a pre-existing condition.

Here’s where to find out if your senator is on the judiciary.

This description of what it is like flying during the pandemic makes me really not want to risk flying to DH’s family at Christmas.

Senator Gary Peters discusses his abortion experienceDonate to his re-election campaign here.

The guy behind Amptoons gives a detailed illustration of how he made his voting decisions.

How Ouija boards really work.

More of DH’s stress baking

I can’t believe I haven’t done one of these posts since June! My uploading says there have been 64 items, though a few of those tell the story of DC2’s birthday cake or are different angles of the same item (I have deleted some of these). Still, there’s a lot of fry breads and other daily things I didn’t get pictures of.  When we’re eating these things I think I can’t possibly forget what they are, but then months pass and… I kind of do?

Buckwheat strawberry shortcakes from Pure Dessert. It was good, but no better than most strawberry shortcake recipes. We actually liked the buckwheat shortbreads better without the cream and strawberries. (They were good together, but better separately.)

Bagels from Bread by Treuille and Ferrigno. DH says, “nice standard bagels” and DC2 notes that zie “loves them.” These are genuine bagels complete with boiling water.

Some kind of meringue, but I’m not sure if it’s one from Pure Dessert or just one we made using the standard overnight kisses recipe to use up leftover egg-whites. I love meringues but they’re really too sweet for my metabolism to handle, so I either have to drink apple cider vinegar after or just not partake (or feel icky).

Some kind of bread… don’t remember what…

More bread!

More breads!

Yet another mystery bread.

This is a fry bread! Using leftover starter.

Scones from Pure Dessert.

I’m guessing bread?

A half recipe of Brownies from the Barefoot Countess. They are dense, rich, chocolatey brownies with a deep flavor enhanced by powdered espresso. Usually we only make them for company, but DH had a hankering and its been a long time since we have had company.

Strouds cinnamon rolls from Cooks Country magazine. These are incredibly sugary and buttery. You roll them in cinnamon sugar butter before baking and then you pour cinnamon sugar sludge over the top after they come out. I preferred without the sludge, but the kids love it. DH notes that these were more of a pain to make than expected.

Banana bran bread from an internet recipe. We had leftover bran from DHs bran muffin cravings. I liked it! It was not too branny and made the banana bread seem heartier than standard.

Pane de ramerino, aka rosemary raisin bread from Bread. I liked this a lot. DH says nice and the rosemary is interesting but to try the variation with figs and almonds.

DH had a day off and made this amazing brunch item from Simple by Ottonleigh. The bottom is brioche from Pure Dessert which we have decided is our favorite brioche by far, then it is baked with a seasoned butter. Then topped with seasoned roasted portobella slices, fresh basil, and a poached egg. These were to die for. I love him so much. DH, not Ottonleigh, though Ottonleigh does have a special place in my heart these days.

Brioche from Pure Simple. Our favorite of our … 5? brioche recipes. Probably because it has the most butter of all of them and is thus difficult to over bake.

Chickpea Spice Bread from Home Baking. This was really good with a complex flavor that includes bay and cinnamon. It was non-trivial to make, and took about 3 days with rough timing between rests.

A full picture of the Chickpea Spice Bread from home baking during its final rest– after all that work we had to wait to eat it!

Marie! The baguette! Actually: Pain Ordinaire from Bread. It was inoffensive and very good with jam.

I wanted to cry this one was so good. Those dark olive-like things are black grapes. This is schiacciata con l’uva from Bread. It tastes like a combination of Christmas and summer. Sweet but not too sweet, all around wonderful with raisins and grapes and fennel and brown sugar. So amazing.

DH had two grant proposal deadlines in short order. I think this is the only shot of those muffins to the left that are actually biscuits. He says it was just an online drop biscuit recipe.  (Usually we do drop biscuits from the old fashioned cookbook.)

Double chocolate chip cookies, but I’m not sure where the recipe came from.  He says it’s his standard recipe from when he was perfecting chocolate chip cookies back in grad school (but with some of the flour swapped out with cocoa powder).  Those were good times.

Overnight kisses with chocolate added. DH does not recommend putting chocolate powder in a meringue recipe, instead look for a meringue recipe that has cocoa powder in it.

Anise “bagel” from Home Baking (I think), but they’re really more like a cookie than a bagel. They’re a lot like the anise ring cookies you can get from some European bakeries, but with a bit more chew and a tiny bit less crunch.

This is a slice of cardamon cake from an online recipe. It is very one-note cardamon, but I really like cardamom, so…

I think this is a bran muffin.

Cornbread with cheddar and feta from Simple

Another shot of the Cornbread from Simple.

An irish soda muffin. (Not sure which irish soda bread he used– we have several that we like)

Herb fritters from simple

Some kind of misshapen bread that was still delicious.

DH accidentally made 10lb of rye bread. This is one five lb boule.

We made these in August… we think they were savory empanadas using pie dough and some kind of leftover stew.

smores cookies from cook’s country magazine

schiacciata con le cipolle rosse e formaggio: schiacciata with roasted red onions and cheese. This made two enormous schiacciatas. They were yummy and had great flavor and texture. Also I think they were beautiful.

DC2 requested a chocolate mint cheesecake for hir birthday. DH got this far with an online recipe and then I took over. (Really, he did all the hard work. But… this did not at all look like the picture online even without the green food coloring.)

Flattened out the “rosettes” then sprinkled andes mint bits and placed strategic andes mints and a single mint oreo (leftover from the crust) in the center.  Sometimes simpler is better. DC2 was very happy.

Another plum tart, but this variation has sour cream and sugar on it, so it’s a bit cheesecakey.

vanilla cupcakes with chocolate frosting (for DC2’s minecraft party– we dropped them off at houses)

Fig and thyme clafoutis from Simple

Cordon rose banana cake from The Cake Bible.  I really enjoyed the flavor contrasts– sweet and tangy.

Another version of the Cordon rose banana cake from The Cake Bible with a citrus glaze.  We liked the chocolate frosting better.

I’m guessing… bread?

More challah.  My notes say, “DH’s grant wasn’t even discussed so he made challah”

Because sometimes you just want challah. You know?

Mixed berry pie. (Made at the same time as the next bread.)

All my notes say for this bread is, “DH has been very stressed out.”

Pound cake from pure dessert, but I’m not sure which one.

I’m not sure what this is. Carrot cake? But surely I would remember carrot cake…

Grand marnier cake, I think from The Cake Bible.

Panforte nero from Pure Dessert, which is really more like a candy. It’s super chewy chocolate fig with nuts. Not actually that sweet. It lasts a long time and is very Christmassy.

Plum tart from Home Baking.

I’m pretty sure this is a raspberry rhubarb crumble from an online recipe.  The grocery store had rhubarb which I LOVE and is rarely available.

We’re blanking on this one, but we’re going to guess that it’s bread. DH’s guess is that this is a stromboli, possibly from Bread, but with WW or rye flour instead of all purpose.

I mean, this is an apple cake, but which apple cake? Some kind of apple upside down cake. Oh, June, you are so far away. Our memories are far away.

We’re thinking this is some kind of cinnamon bread. What kind? Who knows! Summer is but a fleeting memory.

This is beet bread from Simple. I LOVED it.

Have you been continuing quarantine baking?

It was nice being high income while it lasted

For a little while, DH and I were making joint more than what Obama/Biden’s campaigns considered “middle class” (we never did make it above what Biden/Harris consider their cutoff for tax increases, but that’s an insane number).  It was really nice.  Like… money just did not matter at all.

I was just about to start living like someone who makes a lot of money– sending DC1 to a fancy summer camp, going on a vacation that wasn’t family or wedding or work-related (what can I say, I dream small), and then the pandemic happened.  So we went back to spending like we were upper-middle-class meaning buying whatever we wanted at the grocery store and maybe a bit less comparison shopping.  And we’d hit that point a long long income ago.  Other than deferred maintenance and replacements we didn’t actually DO anything with the money, but boy did I dream.  Kids need more Spanish?  Maybe we should spend a month in a Spanish-speaking country one of these years.  Or the kids could go to Interlochen, which my cousin went to but my family could never come close to affording growing up.  (Are my dreams too small?) But.. pandemic.

So I don’t really know what it like to spend as if one is making more than 250K/year– we never got there with spending.  The money just kind of piled up and I put it in IRAs and donated some and finally got nice countertops for the kitchen, replaced our grad school and first-year-with-a-real-job cars, and did a bunch of home maintenance stuff that suddenly came up because we’ve been living in this house for well over a decade now.

And then the money ran out at DH’s company.  So they got furloughed.  And then it turns out there was less money than expected, so the layoff that was supposed to happen in December is happening in November and the grant that was supposed to happen in January got rejected on a paperwork issue and the other grant that could have happened in January wouldn’t actually happen until April if it gets accepted.  And the company owner is getting closer to 80 and really wanting to wind down and retire for real.  So… this might be the end of this job that DH really enjoyed.

Now, with just my income, after two hard-fought raises to get me closer to market value, we are still upper-middle-class.  We can still buy whatever we want at the grocery store.  With the money I’ve kept in cash once it became clear that DH’s company was having problems we probably don’t need to make any major changes to our lifestyle or purchases.  If DC1 goes to a fancy college with a big endowment, we may be eligible for some financial aid, whereas with DH working we would not be.  (And we might have to take out loans depending on where zie goes instead of cash flowing what the 529 doesn’t cover.)

DH probably doesn’t ever have to work again so long as I keep employed.  He can be FIRE, but without the money-making blog, just living as a house-husband.

He’ll probably want to work again eventually, and I admit, I do like it when he brings in money.  That paycheck was awfully nice while it lasted.  Being high income is really really nice and don’t let anyone tell you otherwise.  But it’s also nice having someone completely trustworthy and intelligent around to just take care of things with the house and family, so long as he doesn’t spend all his time pulling weeds.  (We’re keeping the lawn service this time so he will not have an excuse to mow.)

So, I don’t know what will happen.  This job is probably done– most of the other members of his company can’t wait until April for uncertain income.  They’re likely to find work elsewhere.  And then there will be nobody in the company.  The company owner has paid salaries out of pocket before and taken out loans etc. but seems disinclined to do so this time around.  And DH really doesn’t want to do another systems architecture project to tide things over like last time.  We don’t really live where DH can do things based on his PhD (other than being an adjunct or post-doc which are low-paid and he doesn’t want to do if we don’t need the money).  His best option is probably to do contract work from people in his network.  We’ll see if that is forthcoming, though he wants to take a longish break before sending out feelers.  Most of his friends at the big companies on the coasts have left said companies and gone to work for less money at start-ups.

I don’t have a moral– this is just an update.  I’m about to get a house-husband which is very nice in many ways.  And our family will now just be bringing in lots of money rather than unfathomable amounts, and we’ll no longer be saving up insane amounts.  This won’t become a travel blog since we tried to go to Portland for our 20th anniversary and ended up with a Pandemic instead.  Obviously we were not meant to go anywhere.  The possibilities are no longer endless.  I won’t have obnoxious posts about what to do with all this extra money.

Money goes to:

My 403(b)
My 457b
My backdoor roth IRA
DH’s spousal IRA (starting in 2021)
DC2’s 529 plan
General expenses (which will be going up since I’ll have to add DH to all my insurances).

I don’t yet know if we will be taking out of savings or if we’ll just be living off my salary (I haven’t gotten paid yet for the year, but preliminary estimates suggest I take-home a little more than we spend in most years so long as we don’t buy two new cars and remodel the kitchen again).  I don’t get paid in the summer unless I have a grant, and I don’t have plans for submissions any time soon, so I will have to draw down from savings in the summer.  But we’ve got enough in there that we’ll be fine and will probably still have next summer’s emergency fund left by the time I get paid in October.

So… a bittersweet update.  But far better to have been temporarily insanely high income and to have saved it than to have never gotten those savings at all.

Again don’t let anyone tell you that money doesn’t buy happiness.  Boy is it nice to have more income than you could ever need.  It is lovely even if you put that money away to buy future security and future happiness.  I bet it’s even lovelier to be confident enough in that income stream to bump up spending.  (And we still can’t afford to buy a house in Paradise…)  I wonder if it’s good that we didn’t get used to that high income since we won’t really have to be cutting, or if I regret not having had those experiences we could have had (could still have if we spend down savings…)  And I feel a little sad that we weren’t able to give our kids the benefits of expensive summer camps and fancy travel and so on.  But they’ve still gotten a lot of benefits from growing up upper-middle-class (and occasionally traveling with me to conferences), and they have a lot of life left to live.  We have a lot of life left to live.