Do you guys have a 401K?

I agree with blazerboy here. He calls them uninformed, but I'd call it sound.

As for the no-term life insurance policy.... that doesn't really do you much good. But it'll be there for your girl/kids/however you've split you're beneficiaries.

 

The life insurance program I have for $500k is always available for as long as I pay and stay alive. After 20 years; the policy will have "cash value"; which can be borrowed without having to pay taxes. I am using this for a little "bonus" to use when I need to purchase something and don't want to use my regular income. Basically i keep paying for the policy and when I do pass, my kids will receive the 500k

Yes the Simple IRA is a "pre-tax" retirement account.

I like the mutual funds and individual accounts so I can pick the funds and companies. Just a personal preference. The fees are fine as long as the funds outperform the fees by a multiplier of 10.

I cannot take write offs for any interest paid because of my pay scale. I understand the "leveraged" investing benefit; but I like having them paid off and set in my living trust. I am able to place 2 million of assets that are tax deferred after death. It's a good place to put something that appreciates, because my beneficiaries will only pay the tax of the actual value of property at the time it's put into my living trust. In order to do this, I have to own the asset completely.

Absolutely! Thanks for the opinions! i wouldn't have asked unless I thought you could answer them for me.

 

I'm a financial planner (for what it's worth) so I've got a decent amount of experience in this area. You should really talk to a CFP or even an advisor at your local bank. They can give some advice about asset allocation and help with the math figuring out how much income you need, projected rates of return, and how much you need to contibute. They can also go over with you the different types of accounts and the reasons to open/not open one. I've noticed more that a few errors in this thread regarding some of the advice you've been given.

One word of advice though, especially if you talk to a commission based advisor. Many of them will push annuities because they pay the advisors well. I'm not saying annuities are always bad, but they serve a specific purpose and too many people buy them without truly needing them and end up paying huge fees. Also, take their allocation recommendations and build a portfolio using ETFs. They are cheaper and the advisors will try to get you to buy A shares which pay an upfront commission of around 4.5% (without breakpoints). Some no load funds are OK but expenses are still usually lower in ETFs. ETFs usually track an index but there is no guarantee or even probability that an actively managed fund will beat the market.

 

Actually there is benefit for having the life-insurance because you can borrow from it without having to pay taxes for the money borrowed. And the pay back goes back into the policy; which I own, so no money lost. There is a small increase of yield; price they pay to have your money now. I think it's valued at 3% growth from money invested.

I do no-term for many other reasons too. I actually have policies for my children (young age). Not for my benefit, but the no-term policy is really really cheap when you have a young kid set up. I am paying $80 per month for a 500k policy for each of my kids. When they come of age, they can take over the policy and still only pay $80 a month for the rest of their lives. The cash value will be there for them to borrow in 20+ years.

 

Yeah, I get that aspect of life insurance (my brother deals with life insurance, so I'm learning a lot and quickly about them). You are right - there is some value to you while living, though the real benefit of it all is for your family (and really, what father doesn't want to know he's taking care of his family even after he is gone), unless you take the cash value.

Smart move on setting up the insurance for the kids. My brother helped me do the same. They can cash out at age 20, which if they do, it's basically been a savings account setup for them that they can use for college/home/wedding/whatever at that time. Many parents pay for these things for their kids anyway (well, at least before our economy went into the crapper) - if they had been smart and set these policies up for their kids when they were young, they'd save themselves a lot of cash long-term.

 

Closest year yet for breaking even. I get back $53.47. Somewhere I failed slightly.

 

Yeah this is a good read on the "living advantages" of whole life insurances.

http://www.choose-financial-freedom.com/advantages-of-whole-life-insurance.html

This is a really good plus, IMO.

 

Nah I'm just another Gen X kid who watched his baby boomer parents lose their 401K to bad investing habits and see that they will have exactly dick when they retire, sick and spent, from a workforce rife with callous exploitation. If I'm going to be as empty and dead inside as my parents are at 60, I don't want to be waiting two years for social security.

 

Amen, brother. Not my parents, but several other people I'm close to who are boomers have fucked up their retirements flatter than hammered shit. I look at my generation and the Millennials and it just gets more and more bleak.

Seems like there will be literally hundreds of millions of Americans who retire in this century with little more than social security. You can blame stupidity, bad planning, bad policy, whatever. But it's pretty clear to me that at some point there will be a massive tax on the wealthy to sustain SS, pay for health care and probably clear out billions in student debt.

You can argue its socialist or whatever, but when a lot of broke people can vote and a very tiny few have most of the wealth, it will not go well for the wealthy.

 

Works for me. Even a little redistribution would do wonders, unless we plan on a massive die-off to balance the budget.

Sorry I'm so bleak, but my dad nearly died in February (staph infection), right after being laid off from the company he's worked at for 40 years. He's lost 30 pounds of muscle mass, can't walk without a cane, shakes so hard he can't paint anymore (always was his second income). He's fucked. Totally fucked. So I'm supporting my parents (paying for COBRA, paying some of their bills) while he recovers enough to get out for interviews with companies who want to pay him half what he's worth to squeeze the last bit of enthusiasm from his withered husk before he dies.

I really don't have a great opinion of capitalism right now.

 

I'm sorry to hear about your dad. Good for you for supporting your parents. You're not alone.

 

Yeah, believe me, you're not alone.

Kinda funny when I hear older people talk about my generation, how we expect things to be handed to us, how we aren't hard-workers, etc.

Not trying to toot my own horn, but I have a W-2 job since I was 14. Since I started working at 14, I have always had at least one job, if not more, and I continued to pick up extra work/odd jobs at the same time. Before I was 14, I was mowing lawns, water lawns, raking leaves and doing other house work, babysitting, etc.

I was taught that I needed to save and build my bank to take care of myself and my retirement. I was told to start saving for retirement at a very young age (that was heavily instilled in me from the time I was 14).

Nobody ever told me I was really saving for my parents'/in-laws' retirements.

 

I know what you're referring to. I'm in the same situation. But keep in mind that even though your current income level keeps you from claiming a yearly loss on the real estate, you can still deduct the interest as an expense to offset the rent income. And then any loss that would have been claimed in a lower income bracket will be accumulated as a loss against your real estate that will be realized if / when you sell the property.

 

80 to 90k a year. If I decide to go in feeders it'll be around 100-110k

 

It's easy to write off the small amount of rent by the Gardner, trash, housing tax, ect.

 

I think I'm missing something here.

Why wouldn't you want to take advantage of these low interest rates and just accumulate "losses" of interest and depreciation? Do you assume that you'll never sell the houses and wouldn't get to realize those accumulated losses?

 

The houses will appreciate by the time my children are of age. These houses aren't for my benefit. I needed the houses to be paid off completely to put them in my tax sheltered living trust. If, in 10 years, the houses appreciate by 1,000,000; and I pass; the children pay tax on the price I paid for the houses at that time.

 

I feel your pain.

 

From what I remember, student loans are very low interest right? I think it's actually better to save that bond or invest in something that theoretically gives you better interest yields than what interest you pay on your loan. I think a student loan is around 3% right?