A devotion to saving 15 percent of pay, a small inheritance and some investment prowess helped Eleanor and Mark Easterlin build a seven-figure portfolio on one military income.
And now that Mark, 49, has retired from his U.S. Navy career, he has landed a great job with a private military contractor that will bring the couple's annual income to $100,700, including his Navy pension.
Despite all that, uncertainty knocks.
Mark's new job is funded through a military contract that could end suddenly, and his specialty -- military linguistics -- could be difficult to translate to the private sector because he lacks an advanced degree.
Meanwhile, their oldest son, 17-year-old Andrew, will start college in the fall, and their youngest, 14-year-old Richard, is just three years behind.
Andrew is a standout student who has qualified for myriad special honors and scholarships to Florida schools that would lower his out-of-pocket college costs to a few thousand dollars or less over four years.
But he and his parents also have been considering a small private college out of state that would cost an estimated $15,000 each year after grants and aid.
"Mark and I differ on college,'' Eleanor, 52, said. "I think we should save on undergraduate costs and spend more for graduate school.''
Mark, meanwhile, admits he's "living in the past,'' not acknowledging that grad school is becoming more and more a necessity for significant careers.
"I hadn't really planned for beyond four years. I'm thinking more about these next four years, that it's the last [financial] thing I'm going to do for Andrew, and because of that I don't really mind paying extra for a private school.''
Both parents have big dreams for their sons, and it's only natural that they would want to share their good fortune to help the boys get a good start in life, said Sharon Watson, a certified financial planner with Dallas-based RAA Wealth Management, which recently was acquired by E-Trade Financial's wealth management unit.
But spending big on a private school for Andrew will tear away at the couple's safety net for retirement and limit their choices for graduate school and Richard's college experience in a few years, Watson said.
Running the couple's finances through several diagnostic tests, including a new retirement income strategist tool from Morningstar Inc., Watson said their finances would be devastated if their income takes a hit at the same time they're paying for college.
Sure, they've got more than $1 million in assets, but that includes the face amount on their life insurance policy and their $200,000 home. Their liquid assets total a healthy, but humbler, $424,450.
"The review pointed out how everything could go wrong. Everything turns out OK for them if they just don't go nuts paying for college, such as pulling out home equity. Their assets just can't sustain that,'' she said. "It was difficult to say because I felt their dream die.''
On a positive note, however, the family is waiting to hear about the final financial package from the private college. If they end up qualifying for more aid than expected, the dream school could work, Mark Easterlin said.
"It's just really good to know what the limits are," he said. "We were at a real crossroads because I felt we'd done a good job saving and had a real good start, but I was at a loss for the next steps.''
That's where Watson came in. In addition to the college planning, she made several suggestions for tweaking the couple's financial portfolio to get them ready for the college years and then retirement.
But the key word is tweaking, not cutting broad swaths through their financial lives, Watson said, explaining that much of their portfolio was working well. Even more important, however, she didn't want to charge in with lots of moves that would generate big capital gains during the years when the family is attempting to maximize their financial-aid options.
Still, one area that concerns Watson is the couple's $38,900 worth of individual stocks, which account for 9 percent of their total liquid assets.
"They also own these stocks [indirectly] through their mutual funds, and that much exposure worries me,'' she said.
Watson wants them to start selling off those individual stock positions, or at least place limit orders on the shares, which will establish a floor price that will trigger a sale and limit their downside in the event of a big decline.
Even though Mark isn't certain how long his current position will last, Watson urged him to sign up for his company's retirement savings plan to take full advantage of the company match, which he said he'll do.
Within the couple's college savings plans, they should start moving at least half the assets in Andrew's account into fixed income. He'll need that money soon unless he ends up qualifying for full scholarships, she said, in which case the money can stay invested.
By reallocating assets in their retirement accounts to avoid capital-gains taxes, they also should look to move their large positions in large, value-oriented stocks to more growth-oriented stocks, as well as international and smaller-capitalization stocks, she said.
Assuming no major career disruptions, this should put the Easterlins on course for maintaining their current spending through retirement, with a cushion of nearly $200,000 that likely will be left over for their heirs, Watson said.
Not bad for government work.
"My grandmother used to tell me when I was very young that it's not what you make but what you save,'' said Mark, who dutifully took a small inheritance that grandmother left him and started investing in the stock market while still a young man.
Inexpensive medical and dental care through the military also helped the family save, as did driving the same Honda Accord for nearly 15 years and having Eleanor at home to keep a sharp eye on expenses, Mark said.
"We learned early in our marriage to live responsibly on one income,'' Mark said.
Janet Kidd Stewart is a Your Money columnist.