529 College Savings Plan

[NY Mane]

My financial planner told me to invest $100 per month for the next 18 years and that will be enough to cover college.

I just heard a planner on a radio show tell a caller that $10 per week for the next 18 years is enough.

Those are big differences in advice. What do some of you older, seasoned parents do?

[pwherr]

Went two different ways with my kids.One I went mutuals and one I did life insurance(Talked into it by you guessed it an insurance salesman).LOL It really don't matter how just do something.My son is costing right at 18,000 just tuition and room/board.He got some scholarships but still left me to pay about 5k + whatever expenses he comes across(per year) so in 18 years it is going to be quite costly for you.And you don't want them paying back loans right after graduation.

[Dr. Jack]

Good point about the student loans Paul

my son is graduating HS tomorrow as well and it will cost a pretty fortune. We had some pre-paid plans for him and although they help, it’s not enough – I don’t think $10 a week sounds like enough. A $100 a month sounds more realistic

[pwherr]

Originally Posted by Dr. Jack

Good point about the student loans Paul

my son is graduating HS tomorrow as well and it will cost a pretty fortune. We had some pre-paid plans for him and although they help, it’s not enough – I don’t think $10 a week sounds like enough. A $100 a month sounds more realistic

Congrats on your son Jack.100 sounds way more realistic your right.I feel real lucky to get that 18k down to 5K.Apply for every scholarship you can find is more good advise.Writing an essay for 500 bucks is a great payoff!My sons music payed for a good hunk of his.

[ConstantColorUpor]

Im a fnancial representative and a 529 is not a good idea. You are better off investing in a whole life insurance policy for many reasons.
1. If your child gets a scholarship, the cash value does not have to be used for college . 529 plans must be used for college only. A whole life insurance policy allows your to use the cash value for different things as oppose to only college funding. i.e retirement funding
2. Life insurance policies are hidden from the financial aid offices whereas 529 plans are not.
3. Life insurances policies have more tax advantages and also have more flexibility. Something happens to you the beneficiary gets the face value of the policy. You also have cash value buliding that can be used for nearly any purpose and can be taken out as a loan that does not have to be paid back. Lastly whole life policies recieve dividends.

Ask your rep for info on getting a whole life policy, much better investment.

[pwherr]

Originally Posted by boucher21

Im a fnancial representative and a 529 is not a good idea. You are better off investing in a whole life insurance policy for many reasons.
1. If your child gets a scholarship, the cash value does not have to be used for college . 529 plans must be used for college only. A whole life insurance policy allows your to use the cash value for different things as oppose to only college funding. i.e retirement funding
2. Life insurance policies are hidden from the financial aid offices whereas 529 plans are not.
3. Life insurances policies have more tax advantages and also have more flexibility. Something happens to you the beneficiary gets the face value of the policy. You also have cash value buliding that can be used for nearly any purpose and can be taken out as a loan that does not have to be paid back. Lastly whole life policies recieve dividends.

Ask your rep for info on getting a whole life policy, much better investment.

You sound like my agent LOL
All joking aside.The policy is working out very well.

[Dr. Jack]

Originally Posted by boucher21

Im a fnancial representative and a 529 is not a good idea. You are better off investing in a whole life insurance policy for many reasons.
1. If your child gets a scholarship, the cash value does not have to be used for college . 529 plans must be used for college only. A whole life insurance policy allows your to use the cash value for different things as oppose to only college funding. i.e retirement funding
2. Life insurance policies are hidden from the financial aid offices whereas 529 plans are not.
3. Life insurances policies have more tax advantages and also have more flexibility. Something happens to you the beneficiary gets the face value of the policy. You also have cash value buliding that can be used for nearly any purpose and can be taken out as a loan that does not have to be paid back. Lastly whole life policies recieve dividends.

Ask your rep for info on getting a whole life policy, much better investment.

Originally Posted by pwherr

You sound like my agent LOL

lol

[Bobtheicon]

Condoms are cheaper

[WildKat]

Originally Posted by boucher21

Im a fnancial representative and a 529 is not a good idea. You are better off investing in a whole life insurance policy for many reasons.
1. If your child gets a scholarship, the cash value does not have to be used for college . 529 plans must be used for college only. A whole life insurance policy allows your to use the cash value for different things as oppose to only college funding. i.e retirement funding
2. Life insurance policies are hidden from the financial aid offices whereas 529 plans are not.
3. Life insurances policies have more tax advantages and also have more flexibility. Something happens to you the beneficiary gets the face value of the policy. You also have cash value buliding that can be used for nearly any purpose and can be taken out as a loan that does not have to be paid back. Lastly whole life policies recieve dividends.

Ask your rep for info on getting a whole life policy, much better investment.

Way to step up Boucher! That's what we are here for at the mall......Some solid info.......Now how do I get a chick? lol

[Yankee23]

Originally Posted by boucher21

Im a fnancial representative and a 529 is not a good idea. You are better off investing in a whole life insurance policy for many reasons.
1. If your child gets a scholarship, the cash value does not have to be used for college . 529 plans must be used for college only. A whole life insurance policy allows your to use the cash value for different things as oppose to only college funding. i.e retirement funding
2. Life insurance policies are hidden from the financial aid offices whereas 529 plans are not.
3. Life insurances policies have more tax advantages and also have more flexibility. Something happens to you the beneficiary gets the face value of the policy. You also have cash value buliding that can be used for nearly any purpose and can be taken out as a loan that does not have to be paid back. Lastly whole life policies recieve dividends.

Ask your rep for info on getting a whole life policy, much better investment.

Thanks for the info, good stuff

[NY Mane]

Originally Posted by boucher21

Im a fnancial representative and a 529 is not a good idea. You are better off investing in a whole life insurance policy for many reasons.
1. If your child gets a scholarship, the cash value does not have to be used for college . 529 plans must be used for college only. A whole life insurance policy allows your to use the cash value for different things as oppose to only college funding. i.e retirement funding
2. Life insurance policies are hidden from the financial aid offices whereas 529 plans are not.
3. Life insurances policies have more tax advantages and also have more flexibility. Something happens to you the beneficiary gets the face value of the policy. You also have cash value buliding that can be used for nearly any purpose and can be taken out as a loan that does not have to be paid back. Lastly whole life policies recieve dividends.

Ask your rep for info on getting a whole life policy, much better investment.

Do whole life insurance policies pay out high commissions to the agent selling them?

I am hardly paying fees with Vanguard's 529 Plan. What kind of fees are associated w/ whole life ins?

Also, I can chose where the investment $'s go. The agent controls the whole life policy, right?

Is the annuity fixed? If the market goes up 25% and I am locked in at 6% then I do not realize or keep that 19% difference, right?

I always heard that whole life ins is a good investment for high net worth individuals who cannot invest in a 401K or a Roth IRA. Someone at my level can grow the money tax free until 59 1/2. The 529 grows tax free also as long as the child goes to college. I hear a lot about people in whole life ins who have no business investing in it because agents pressure them.

An index fund seems like a smarter investment that I can control.

[NY Mane]

I have term life ins because my 401k, Roths and stocks are a little under 100K. If I died that would not cover a mortgage or college. I will have term life ins until my kid graduates from college. By that time the nest egg will be big enough so my wife and I will not need term life ins. Whole life ins requires you to make fixed payments monthly/yearly. Large caps are down 11% YTD. So right now I have the freedom to invest in a large cap Roth. Whole life ins does not give you that freedom. I don't like the small fixed rate of returns on whole life. The insurance companies get rich on this deal. If the market jumps 20% you don't realize that 20%. And so what if the market drops. There has never been a 30 year period where the market lost money. Index funds with tiny expenses are the best route. The WSJ just covered a story about mutual funds not beating the indexes. To each his own, but I have heard the whole life stories and I don't agree with them. I think the agents make the most commissions off of whole life so of course they will push them. I wonder what the load is? If they charge a 5.75% load then your investment dollar is starting off in the hole. Before your $$$ can even begin to work for you it is -5.75% to start.

[ConstantColorUpor]

Financial Agencies make all their money off term policies. Term policies are great for people who can not afford a whole life policy. Financial agencies end up paying death benefits on less than 3% of all term policies so if you can afford a whole life thats the best way to go. Term policies are typically best for recent college graduates who cant afford the premiums on a whole life but still need some protection to balance off student loan debts. Also like your saying whole life policies are not market dependent so its a huge piece to having a balanced portfolio. I know the company I work for has been no lower than 7.5% for the last 55 years. So it times like these when peoples portfolios are struggling, a life insurance policy than does not rely on the market is very important and often overlooked. And I make the same commission rate no matter what I sell.

[NY Mane]

So after I max out my 401k and Roth can I further invest in a whole life ins?

I understand what you are saying. I hear though that some advisors recommend the whole life ins to young people who aren't even maxing out a 401k or Roth. Shouldn't they do their 401k and Roths first, and then the whole life second?

I agree w/ the term comment. It is cheap at $35 per month for me for $600,000 coverage.

After maxing out both the 401k and Roth I have no room for extra investing. I guess for those who know nothing about the market it is easy to just give the wheel to an advisor to deal with it. The whole life might make sense for some but I really believe the Roth IRA is one of the best investment vehicles, especially for people starting their work life. I don't think a 22 year-old should touch a whole life ins policy until after they maxed out their 401k and Roth. But that's just my opinion. In the end if you have enough money saved through any investment then you are smart and also one of the lucky ones. It is better to do some type of investing instead of none.