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Discussion Starter · #1 ·
I'm just wondering what I should do or what you all have done for your kids. The back story on me, I'm single 27, and just had a kid 5 months ago. I might get married but not right now. I make about 160k a year, put 5k in s&p every year, have 1,000,000 whole life insurance, 1,000,000 term. So far I bought 400k whole life for my kid. I don't qualify for an E.A.S fund for the kid. I haven't talked with anybody about a 529 plan. Are these types of plans any good? Anyways long story short what have you all done for your kids?

I know many people will say drop the life insurance for the kid but my grandpa had it on me and it helped buy my first house and new furniture. Since I can afford it I'm sticking with it.

Anyways, any input is appreciated!!

Thanks!!
 

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My parents bought $100k whole life insurance for each of their 4 grandchildren. Two are ours (5 & 3) and two are my sisters kids.

We make a monthly contribution to each of our kids 529 plans. We started the plans shortly after they were born. In your position, it's probably a very good place to stash money that will grow tax free (for nearly two decades) until it can be used to fund your child's college education.
 

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I'm just wondering what I should do or what you all have done for your kids. The back story on me, I'm single 27, and just had a kid 5 months ago. I might get married but not right now. I make about 160k a year, put 5k in s&p every year, have 1,000,000 whole life insurance, 1,000,000 term. So far I bought 400k whole life for my kid. I don't qualify for an E.A.S fund for the kid. I haven't talked with anybody about a 529 plan. Are these types of plans any good? Anyways long story short what have you all done for your kids?

I know many people will say drop the life insurance for the kid but my grandpa had it on me and it helped buy my first house and new furniture. Since I can afford it I'm sticking with it.

Anyways, any input is appreciated!!

Thanks!!

......keep the whole life (dont change that) There is a a type of Bank account ( I cant think of it right now) that is a little more flexible where the 529 is strictly for college(school), I would split the between the account and the 529 in regards for college. The reason for this is that you may have ALOT of money put into the 529, and your may kid may end up playing smart and going to state college/university. You'll have alot of cash left over in it, and it is strictly for school.

Whole life (then for college diversify between I high interest earning account and a 529 plan)

Thats what I am doing, it adds up pretty quick
 

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2 kids, both have 529 through Vanguard. My FA could have sold me something that would have made him $ but he actually signed me up in his office on the Vanguard website.

Care to share your occupation?
 

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Congrats on being 27 and making $160K / year.

At your income level you might want to seek out a certified financial planner (CFP)

I am not saying to drop the Life Insurance but I would suggest you look at what you are paying and what you will have at the end of the policy. Comparing that to a mutual fund (you have 15 -20 years to accumulate) will give you a better picture if it is a good deal.

I think you can put money in a 529 on a post tax basis; the gains if used for education may not be taxable. A CFP would have these answers - if they don’t find a new one.
 

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The reason for this is that you may have ALOT of money put into the 529, and your may kid may end up playing smart and going to state college/university. You'll have alot of cash left over in it, and it is strictly for school.
529 plans are fairly flexible and the penalties aren't that excessive when compared to the upside of tax free growth...especially with the years his plan would have to grow.
 

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Discussion Starter · #7 ·
@bru. I own part of a small company that's made up of long term health care facilities (nursing homes). The way I got into them is my mom has worked in health care pretty much ever since she's been in the work force. Here's how I got involved, when I was 22 I graduated from college, went for finance. Then I moved back home to Owensboro KY. I didn't have a job so I worked at the nursing home my mom worked at, I did activities (played games with the residents). When I was 24 I inherited some money from my grandma. When I was 25 I had the chance to buy the building along with my mom and a few others. So I've been working in them ever since. I went for finance because it was easy for me but I never really planned on working in it. I just knew I wanted to make money and learn the knowledge about how money works and the theories behind how to make it build.

Side note: between work and my baby boy up all through the night, I forgot my age for a second. I'm 28, not 27. Sorry!!!
 

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Whole life is generally a bad deal. Whole life is typically only advisable if you plan to keep the policy in force until your death to offset estate taxes, or if you plan on getting a horrible disease that makes you uninsurable, like pancreatic cancer.


Look into term life options and invest the remainder in tax free munis.
 

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I guess I didn't really answer the question.

We have X dollars invested in tax free munis that are labeled "college fund".


I have a friend that buys a piece of real estate for each kid when they are born that is their college fund, but I don't really recommend that unless you are particularly real-estate savvy.
 

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Strongly consider a 529.

Take a few bucks per month ($50,100, 150 whatever) and dollar cost average into a or multiple mutual funds and a little gold and silver. A little bit of money invested and left alone could turn into mega-bucks for him several decades down the road.
 

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Discussion Starter · #11 ·
@gamergirl. I appreciate any info I get!! I just started thinking about it tonight and wanted to see what other people did. I'll probably talk with a financial planner sometime next week to see what they say. The reason I bought the whole life insurance is because I already had some through northwest mutual and it's done pretty good for what it is. For me it's just safe money. I would like to set something up for my kiddo that will benefit him his whole life or at least until he can say he can make it on his own.

Once again, thanks everybody for the input!!!
 

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Ok, if you talk with a CFP, make sure you vet any and all info you get from them (ie, ask if they get a kickback on any insurance or stocks they talk you into buying).


We are fortunate enough to have enough set aside to be able to finance our kids through a post graduate degree, should they so choose.

Incidentally, have you set up a living trust? If not, it's a definite must for you.
 

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Also, you aren't tied strictly to your own state's 529 plan. Most if not all states welcome your participation in theirs. Research the top 10 ranked states and then make your selection.

There are some really neat, creative things you can do with 529's if you ponder on it.
 

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Ok, if you talk with a CFP, make sure you vet any and all info you get from them (ie, ask if they get a kickback on any insurance or stocks they talk you into buying).
In case you missed this part.
 

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I forgot to mention, if you go with a CFP, ask what their rate is. A good rate is < 1.0 (ie there should be a . And then a number).
 

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You're a dude and you had a kid 5 months ago. SCORE!!!! Line up the talk show circuit and save the $ for his/her education. If you can do it again, you'll have even MORE money. Book deal. Movie deal. Action figure deal. You are GOLDEN!

;)


Yer 27. No decent CFP is gonna talk to you, even making $160K/yr. And those of you who think that some person is gonna give him the time of day at less than 1% per year on less than $100K invested??? Not in this rodeo.

Go do some research on 529's. Save your A off. Stop buy whole life. In 5-10 years, someone will be able to help you refine that. But right now it's about putting $ away.
 

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Discussion Starter · #18 · (Edited)
hahahhaha well I guess I should have said my girlfriend had the kid. You're right though!! If I would have had the kid I guess I wouldn't be asking this question because I'd be busy on Dr Phil and medical shows. It would be like the movie when arnold swarchenegger had the kid, hahaha.

On a side note: I've been looking into the 529 plans and there's so many to chose from I just don't know which one to go with. Looking at these plans reminds me of studying for a test.
 
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