I was just curious how saving for kids' college comes into play in the early retirement mindset. Do you hope to give the gift of a college education, to pay part of it, or none at all? How has kids + college affected your journey towards FI?
What I do is to
first define the parameters FI. E.g. a portfolio value of X based on dividends or SWR. Then I add Y to X, where Y is the cost of tuition in today's dollars for my two kids.
My understanding is that tuition costs have been rising faster than inflation. If this persists, my strategy may come up short. On the other hand, my combined portfolio (personal FI + tuition) will be greater than my FI alone, so I should see a little extra growth and/or dividends. Also, I intend to have some kind of "hobby job" once I'm FI that generates enough income to meet most or all living expenses (meaning my portfolio will continue to grow).
There has been some debate on this forum about whether or not you should pay for your kids' tuition. There has even been some debate about the actual necessity of a college degree. In theory, I see both sides of the arguments. In reality, my wife is insisting that (1) our kids to go college, and (2) we pay for it. :)
But, my oldest kid is only 2.5, so it's impossible to say what the state of the world will be in about 16 years. Things will certainly be different, but exactly what will be different and to what degree, who knows?
I thought about 529s, but decided they weren't for me. Now I can't remember why; I don't think I had a terribly strong opinion on the matter. But I loosely settled on the idea of using Series I Bonds (from Treasury Direct) for funding any tuition. I like that they are tax-deferred (no taxes due until redeemed), and may be tax-exempt if used for qualifying educational expenses. So it seems to me they have some of the same benefits as 529 plans, but are still "general purpose", i.e. they can be redeemed whenever, and don't
have to be used for educational purposes.