January Colacurcio and her husband, Ben Staulcup, never thought they would ask for professional money management. Colacurcio is well-organized and handily manages her family’s day-to-day doings — which are formidable. Staulcup, in his spare time, is a DIY investor and he feels like he’s doing a good job.

What changed their minds is that, for once, they were not going to have the expense of kids in preschool. With six kids, ages 1 through 12, this couple has almost always had kids in preschool.

“With the twins moving to kindergarten from preschool, we will have extra money,” Colacurcio says. “Where is it best invested: college, retirement, savings fund?”

In retrospect, those pre-COVID concerns now look quaint.

The couple, both 45 years old, applied for the Money Makeover before the pandemic — which has reshaped life in their 1,800-square-foot home in Seattle’s Magnolia neighborhood. Five of their kids are in public school and are now camped out in front of their laptops trying to learn from home. Colacurcio is also at a computer — she teaches at a statewide online alternative high school.

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“Then there’s a toddler trying to get on everyone’s computer while we are working. Just imagine the scene,” says Staulcup.

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“You don’t want to!” Colacurcio adds with a laugh.

Staulcup is a pilot for a major airline. Because air travel is down so much due to the virus, Staulcup was put on 18 months of leave (paid, but not as much as he usually makes). He sees a silver lining in the change. “I don’t know how we would handle this if I weren’t home now.”

A pilot for 17 years, he believes the airlines will survive this downturn because he’s seen it before. “Each and every time people have gone back to traveling, but it will take a while.”

Because of that uncertain timing, the family is back on a stricter budget. Long term, they are worried about saving enough money to send all of their kids to college and they are also concerned about caring for their aging parents. Colacurcio’s father lives in a guest house in their backyard. He’s fine now, but she is worried that he won’t always be able to negotiate the stairs.

So the couple’s drip of concern had turned into a waterfall of worries by the time our Money Makeover partners, the Puget Sound chapter of the Financial Planning Association, put out a call for planners willing to advise this family. David Hooper and Corey Owen of Kingsview Wealth Management in West Seattle volunteered their expertise.

“They are part of the ‘sandwich generation’ raising kids and helping with aging parents,” says Hooper. “January and Ben had the feeling they were heading in the right direction, but they were not sure they were doing the best things for today and in the future.”

The first thing the planners did was get all the numbers — salaries, savings, spending. Staulcup ordinarily makes $140,000 a year and Colacurcio earns $85,000 as a teacher and sometimes brings in a few thousand more developing curricula. It’s only within the past five years that Staulcup started making good money because he previously flew for a lower-paying regional airline.

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Especially given that they have six kids, the family doesn’t spend a lot.

Because the couple is so careful with money, the only debt they have is the $368,000 they owe on their house, which is valued at $1,000,000. But there is a giant expense looming in their future — paying for four years of college for six kids. They’ve set up college savings accounts for their oldest child, but there’s more they need to do, according to the planners. Good thing they are epic savers.

The couple has $714,000 in investments and savings. The lion’s share of the money comes from taking full advantage of contributions to retirement accounts.

“Ben has an almost ridiculously generous retirement plan with the airline,” says Hooper. “Even if he doesn’t participate, the company will put 15% of his salary into his retirement.”

“This is kind of crazy, but I told Ben you could put less into your retirement and put more money toward other goals — like college plans.”

Staulcup has always handled investing for the family, and over the years he has assembled a patchwork of 401ks, Roth IRAs, mutual funds, bond funds and cash.

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“The last few years I’ve been concerned about the stock market. I’ve been pulling back,” Staulcup says. “The feeling I had was that as a super investor, I would invest that cash in a downturn. The downturn happened in March and I didn’t do anything with the money!”

Owen’s advice was that Staulcup should be thinking more about the family’s goals than the market.

Corey Owen of Kingsview Wealth Management  (Corey Owen)
Corey Owen of Kingsview Wealth Management (Corey Owen)

The planners got all of the accounts on one page — and found the nest egg is made up of 9% cash, 26% bonds, 65% stocks. They believe that’s too much cash — and that the allocation is too conservative for a relatively young couple.

David Hooper of Kingsview Wealth Management  (David Hooper)
David Hooper of Kingsview Wealth Management (David Hooper)

“Dave and Corey’s point was that we should be 80% in the stock market,” says Staulcup. “They stressed that when there are dips we won’t be using that money for a long, long time.”

“You will typically have a higher return over the long term by taking on more risk,” Owen says.

This was hard to hear for Colacurcio. “Me, I’m really more comfortable if I have the money in my bank account or in a CD. Not that I don’t trust Ben. But I feel better about taking more risk now that we’ve gotten professional advice.”

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Planners crunched the numbers way into the future and found that by following their plan, Colacurcio and Staulcup could have a comfortable retirement and still have money left over for their children to inherit. And that means they could splash out a bit more today.

Colacurcio says, “One of the things Dave and Corey said to us that was eye-opening: ‘You guys need to live a little!’”

But the couple says the only luxury they need is the ability not to stress out about money, and they say the planners gave that to them.

Each child should have own college-savings plan

The average cost of in-state tuition at a public school in America is almost $10,000 a year and at a private college is $35,000 in 2020. Living costs for students on campus are roughly $20,000 for the nine-month school year.

Multiply that amount by four years and six children and you can see what this month’s Money Makeover couple is up against. There are two types of 529 plans — college-savings plans invested in the market and prepaid tuition plans (called GET in our state). Colacurcio and Staulcup set up both kinds for their oldest child, who is 12.

“It’s classic first-child syndrome,” says Hooper. “January and Ben put everything together for their first child, 529 and GET, but as they had more kids they stopped planning.” Hooper advises them to fund five more plans — with different amounts of risk based on the age of the child.

“The planners helped us realize that the 529 for our oldest child needs to be diversified differently than for our 1-year-old,” Colacurcio says. One plan should be invested more aggressively “to maximize the return for our toddler,” but for the soon-to-be teen, as she “gets closer to 18, her account should be protected against drops.”