She may think that, but money in the 457s will be sheltered, under most conditions. However, how much he would be required to pay would depend on the job he could have, not his current job-less status. That is why I would include in the FIRE budget the $300 child support and whatever other support you give the kids. For your husband, please explain that just because you shelter the money does not mean you would not help the kids. All it means is you (both) chose how to help them, not his ex or a judge.
Thanks. Yes, all retirement savings should be sheltered. I guess I'm more concerned that we would be forced to work 4 years past my desired FIRE date. Our planned retirement is just after the youngest should leave for college. So, unfortunately, even if we had custody at the time, we would not be able to use our retirement financials to qualify for aid. Still, if their mom remains unmarried and underemployed, they may qualify for quite a bit.
Definitely talk with the divorce attorney. If the ex files for college payment, I'd think your DH could file to convert child support to it and/or adjust the amount.
The test for tax dependent status of a full time college student hinges on who is paying 50+%, including the student.
Also, what if a child doesn't go to college? You are stuck if funds are in a 529.
The issue of support is tricky regarding the future relationship between your DH & his children. I suspect some states have 19 to make sure children are out of HS before support ends.
Converting child support to tuition is reasonable and it would really only impact us for 4 years post FIRE, so that could be worked into the plan.
Well, I figure at least one out of the three will go to college and 529s are transferable between beneficiaries. But, yea, I see your point.
Child support used to go up to 21 here but was changed to 19 a few years ago. Seems reasonable. Even if were 18 we would pay until something like HS graduation + 3 months. Only fair.
I think I have an answer that both you and your husband will like: Create a postnuptial agreement, right now, stating that you will NOT be contributing towards your step-children's college expenses. This accomplishes two very important things:
1. It allows you to save towards your own financial well-being, which should be your first priority anyhow. I think just about any financial planner will tell you that you first need to finance your own retirement, then you can contribute towards college to the extent you are able.
2. It will completely exclude your income and assets from any financial aid determinations. When you file for financial aid, make sure to tell the financial aid office about the postnuptial agreement, and tell them you want the kids' need determination to be specially calculated using only your husband's info. This works. This was done in my own case (had a step-father who refused to pay and therefore ended up with a very favorable need determination), and I worked as a financial aid counselor myself. But you have to be sure to let the financial aid office know, and document it in a postnuptial agreement so it will be an open/shut case for the financial aid office. If you do not let them know, they will just do the computerized determination based on both your assets/income.
Also, you are not a bad person for not paying for step-children's college. You have no obligation to do so. Hell, a lot of biological parents legitimately don't feel they have an obligation.
Ooh, this is interesting! I, too, had a stepfather who refused to pay, and who made way too much for me to eligible for any financial aid. I was very fortunate that I had merit scholarships for almost my complete tuition. I had a small loan for the rest.
As a middle aged Mustachian I have several close friends dealing with this issue. Many commenters have already given the best advice, max out all retirement accounts. I would not open 529 accounts because they would be considered 100% available to the kids. You do not yet know what the future holds for them or for you and your husband. (Does your husband understand you are funding your 457 more than his?). Understand, and try to accept, that while your husband may have no legal obligation to pay for college, his kids will expect him to contribute to the extent he can and probably be quite angry if he does not. If the kids seem like they will take college seriously, he will probably want to help them. Yes, this may mean delaying retirement, at least for your husband....many people do that to send their kids to college. Yes, it is a much more complicated situation than when kids' parents are married and on the same page. I would think carefully about what relationship you want with these children, too.
I do really care about the kids and I want them to have a better situation than I had. My husband tries to teach them about money, responsibility, etc. They are very clear that dad has "no money". They probably assume their mom is rich since she takes them to Disney and cruises every year, but I digress.
Ha, yes my husband knows I am funding my 457 and not his. He has said before that if he hadn't married me he would be living in a van down by the river.