Tag Archives: Set aside time to review your finances

Whole Life is not a great “Investment Alternative” – use the death benefit when age becomes a factor

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Whole Life is a poor “investment alternative.” Consider what an insurance company may say, annotated with our comments:

1) Tax Deferred
Does not make up for fees and poorer returns. The mortality fees alone can bring the total fees up over 2%, which compares poorly to a stock index bought via an ETF, were the fees are below .1%
2) Attractive returns compared to bank alternatives
Yes, to a bank, but NOT to your own portfolio of stocks or funds
3) More than initial deposit guaranteed in early years
Only at first and at some cost
4) Strong dividend history
Dividends are only a part of the return on investments – whole life is far worse than a good variable life policy let alone stocks purchased directly or via mutual funds, over time
5) Death benefit (DB) income tax free
Always true of life insurance because it is subject to estate taxes
6) Returns very high if DB paid in early years
“so what?” This is intended to be a long-term purchase
7) Beneficiary can be changed easily without having to redo wills and trusts
Meaning that proper estate planning is not being done
8) Annuitization of other assets easier to do, which can lead to higher retirement income
“Easier” means you pay them to do it instead of doing it yourself, which means shifting the allocation of your own portfolio depending on cash needs

Same-sex marriages filing jointly with the IRS…

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Kiplinger’s Tax Newsletter reports:

Same-sex couples are one step closer to joint filing of their federal returns. An Appeals Court scrapped a law barring them from being treated as married for purposes of federal law, even though they are legally married under state law. This part of the Defense of Marriage Act is unconstitutional (Gill v. OPM, 1st Cir.).
This decision will almost certainly be appealed to the Supreme Court, delaying any final resolution until next year. So until the High Court gives the nod, all same-sex couples remain barred from filing joint income tax returns with IRS.
In the interim, married same-sex couples should file protective refund claims with IRS on Form 1040-X if joint return status would save them tax. The Service will hold the protective claims in abeyance until there’s a final decision in the case.

Same-sex couples also can enroll in long-term-care insurance programs that states offer to their employees. A federal district court struck down a U.S. law
that disqualifies state-maintained long-term-care plans if married same-sex couples or domestic partners are covered (Dragovich v. Treasury Department, D.C. Calif.).

We will continue to track this…..

Simple words to encourage – to remind yourself or to pass on

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Sometimes you know these lessons and sometimes you forget, or you wish you could pass them on to others

I thought the following list from a Morningstar article on a petite woman now flying 757s was a good summary to pass on:

Here are five lessons Ellen passed on to me that I believe every financial advisor can take away from her story:

1. Don’t let anyone tell you that you can’t do it!
2. Dreams are the beginning of your destiny.
3. Be willing to chip away at your goals for years–success doesn’t have to happen overnight.
4. Always be enthusiastic about your work.
5. Never quit. A lot of people say they want to be great at what they do, but only those with determination and perseverance to push through the difficult days will make it to their goal.

Hope this helps you are someone important to you