In last week’s comments to my post about college vs retirement, one commenter couldn’t seem to decide whether we were rich, hiding our wealth in retirement funds so we would appear “poor” in order to qualify for federal financial aid for our daughters, or whether we were actually poor, living “on the dole” and struggling through each month, doomed to a life of poverty.
We definitely are not wealthy, and there is no fortune hidden away or waiting in the wings. We don’t own property. We’ve never received an inheritance other than the few thousand dollars I received over 20 years ago from my dad’s life insurance policy, which we used to pay the closing costs on our first home. The small amount of money that’s sitting in our IRAs now is only there because both Brett and I had small 401(k)s that we rolled over when we retired. And, when I say small I mean small. We spent our earlier savings bringing our girls home, and never earned enough after we adopted them, even when we were both working, to put much of anything aside but the minimum.
So, maybe we are poor.
I sure don’t feel poor though. We have a more-than-sufficient monthly income from Brett’s military retirement, Social Security, and the pensions we each receive. Put together, and with no FICA or other employment taxes coming out; no health insurance premiums thanks to Tricare eligibility; and no Hawai’i state tax liability, our monthly income is enough that we have a nice amount every month for groceries, and we can easily cover our rent, as well as gasoline, cable, phones, insurance, and other monthly expenses including my never-ending student loan payment, our only debt. We are able to put a little aside every month for travel and to pay for the seemingly non-stop expenses of two girls in high school (I just finished ordering graduation robes and regalia, and coming right behind is the cross country banquet for two, two new custom swimsuits and swim caps for the swim team, and grad night fees). We will be able to pay the fees for WenYu’s college applications (at $60 each). We bought plane tickets for Meiling to come home at Christmas, and Brett’s ticket to the mainland on our credit card for the cash back rewards, and then paid it off immediately. I can occasionally splurge on things like a spa day with a friend, and we go out to eat now and again. We maintain an emergency fund. There’s money in the checking account at the end of each month.
Even though it’s more than adequate for our needs these days, our adjusted gross income is still low enough that our family qualifies for federal financial aid including Pell Grants, work study and subsidized Stafford loans, the kind of aid that’s there to help poor or low-income families afford a college education. We’ve perennially been that family earning just enough to disqualify us from assistance for something, but not enough to afford it otherwise, but when it comes to financial aid we qualify and gladly accept it. Like millions of other lower-income families, we need financial aid to send our daughters to college; there is no way we can afford what a college education costs these days without help. Giving up a few things out of our monthly budget, or stripping our retirement accounts, wouldn’t change anything.
Although we may be considered low income on paper, I still feel very rich. Brett and I have a long, loving and happy marriage; we have three wonderful daughters, a successful, generous son and beautiful daughter-in-law, and an adorable grandson. We’re all in excellent health. Our income and benefits are lifetime, and are solid. Other than my student loan, we have no debt. We are able to live in an incredibly beautiful place, and can afford to rent a nice house and pay our bills without a struggle. With planning and careful saving we can occasionally travel. None of us feels like we need more or that we don’t have enough or that we’re missing out on anything. We eat well, and get to do what we enjoy. We are careful and thrifty with our money and know how to get the most out of it.
Poor? Rich? Those are labels. All I know is that we are living a very good life . . . on not very much.