HENRY Aims to Gather $100,000 for Kids' Future, Prioritizes Trade School

At 39, Cimarron Beckstead has accumulated more than $20,000 for his two children's educational savings, and none of it from his own pocket.

He expresses gratitude towards Alaska's annual oil dividends for this financial boost.

"We preferred investing in our children's future instead of immediate desires like a new television," remarked Beckstead, a parent to young ones aged five and seven, during an interview with Business Insider. "As they grow, we might reassess and consider contributing ourselves, but to date, our contribution remains unnecessary."

This is all thanks to Alaska's Permanent Fund Dividends, where residents receive annual payments derived from oil and minerals revenue investments. The check amount fluctuates with fund performance, with the 2024 dividend set at $1,702, an increase from $1,312 the previous year.

Employed by leading telecommunications firms, Beckstead and his wife enjoy a joint income in the lower six figures. They fall under the HENRY category—high earners not rich yet—a segment that earns substantially but must manage resources wisely due to living costs, debts, or mortgages.

Empowering Their Kids

Beckstead is committed to ensuring his sons are informed about all available paths post-high school, such as trade schools. Both parents avoided student loans since their employers financed their degrees. Although his IT business management degree hasn't advanced his career, Beckstead values it for the knowledge gained rather than job opportunities.

He aims to secure a $100,000 education fund for his children to grant them similar financial opportunities he was fortunate to receive.

"We consider ourselves lucky that our employers covered our education, but it's not a certainty for our children," Beckstead acknowledged. "We're trying to create a safety net for them, an opportunity we're grateful we had."

Considering Alternatives

Beckstead allocates Alaska's oil dividend proceeds into state-sponsored 529 accounts, which grow tax-free to fund educational expenses. Alaska boasts superior 529 plans due to their low costs and benefits for prospective University of Alaska attendees.

Should his children aspire to a pricier educational route than state schools, Beckstead is ready to pull from his savings or 401(k) to meet extra costs.

"I believe we'll manage," Beckstead remarked. "We hope to afford college costs wisely as long as they stick to public in-state schools or trade schools."

As the value of a college degree faces scrutiny and more young people look to alternative routes like trade schools, past presidential administrations have acknowledged the need for increased trade school funding.

College still remains the typical choice post-high school. The New York Federal Reserve reports that college graduates generally earn more than those without a degree.

Beckstead wants to offer his children all their options; economically, trade school is intriguing. Still, he's aware that the sustainability of Alaska’s dividends is unpredictable.

Some lawmakers have proposed reducing dividends, which would affect Beckstead’s eligibility if passed, given their income level.

However, Beckstead remains committed to supplementing from his savings should the dividends cease, ensuring the 529 accounts continue growing for his children’s education needs.

"We're hopeful the savings will suffice depending on their educational choices," Beckstead noted. "If more funds are required, we'll see how we can assist them."