Search found 30 matches

by finallyinvesting
Tue Sep 20, 2022 12:08 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

I’m sorry that grandma paid acquisition costs (and commissions) three times. Multiple years of premiums (albeit small premiums) vanished down the drain. Look at the bright side. It’s a $12k gift from great-grandma. Hopefully your daughter will be able to invest the money and put it to good use. That bright side is exactly what I'm seeing. My daughter set up her Roth IRA from her summer job last year, putting all her earnings into it. It was about $2K, but when you're 18 and working part time at TJ Maxx for 8 weeks during a pandemic that's not too bad. This year will be a bit more, so I'd like to help her fund it while still holding onto some of her money for a bit of fun during spring break. Thank you, again, for your support and encourage...
by finallyinvesting
Tue Sep 20, 2022 12:02 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

Never ever get between a grandmother and her grand daughter. If you are set, smile and be happy. If you are trying to profit that is a different discussion. One I'd rather not contribute to. As Stinky mentioned, my grandma passed away several years ago. But I do agree with you about not getting between a grandmother and her grand daughter. Well, that is unless you're the great granddaughter. I had an amazing relationship with my grandma, but when my daughter was born I was merely the conduit of bringing the great granddaughter to visit. I was relegated to the proverbial chopped liver. And I appreciate your not wanting to contribute to my post as to how to make this gift from a great grandma to her only great grandchild something that will ...
by finallyinvesting
Tue Sep 20, 2022 11:57 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

OnceARunner wrote: Tue Sep 20, 2022 7:43 am
Personal Finance and Economics is a required class to graduate high school in my state.
I live in a state where all you need is a HS diploma to be a HS teacher. My daughter had AP Econ and understands market basics, so that's at least a start.
by finallyinvesting
Tue Sep 20, 2022 11:55 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

I don't mind paying the premium, but I feel like I'm giving her a burden not a benefit. I feel like if I take the (aprox) $12K surrender value and add the annual premium each year into something like VOO or VTI, my daughter would be better off. Since I am the policyholder, the amount will come to me, but I can gift it to her. I'd like to put it into something that can grow tax-free, but she's not likely making enough to max out a Roth, but there would be some that she could put into a Roth. Others have made excellent comments on the reasons to drop the policy. I agree with them. You’ve got exactly the right plan going forward. Go ahead and execute it. This really sounds like the right call. Clear and simple. The OP's daughter will thank hi...
by finallyinvesting
Tue Sep 20, 2022 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

4% tax-deferred 10 year return with insurance company backing compares favorably with T Bonds. What am I missing that makes this a terrible product? It's not terrible to keep by the numbers at all. For me the big thing is that at $12K and adding only $1400 per year, figuring out how to use it is just never going to be worth OP's time. It took me almost a year to understand my NWM IRA once I started tracking it (5 years into this things). Then to realize it wasn't really an IRA but included deferred annuities. I don't have several years to try and understand more about this life insurance policy, it's taken me 7 years to get to this point of realizing I don't think it's the great investment that the nephew was saying it was going to be. It'...
by finallyinvesting
Tue Sep 20, 2022 11:43 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

Thank you for your support, tj. It's good to have another set of eyes confirming a suggested plan.
by finallyinvesting
Tue Sep 20, 2022 11:41 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

There are a couple of advantages to listening to advice from the “total strangers” on this Forum —— —- We are not motivated to make a sale so we can earn a commission. —— We generally espouse the Boglehead philosophy of low cost investing - buy and hold - don’t market time - minimize costs, etc. Learning about financial topics is a life-long endeavor. A great place to learn is on the Forum and in the wiki. I’m glad that you’re trying to teach your daughter to do better. I did the same with my (now adult) children, and they’re much “financially wiser” than I was at their age. I've learned so much from you, Stinky. While I was raised with the traditional belief that the husband manages the finances one day in my late 30s I finally realized t...
by finallyinvesting
Tue Sep 20, 2022 11:35 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

petulant wrote: Tue Sep 20, 2022 8:58 am Remember, financial advisors taking a large cut from assets is not limited to whole life insurance and in my opinion are not even the worst with this whole life insurance policy.
My grandma's nephew was likely after more. He got my great uncle for $500K+ that he invested with Madoff. The nephew was after more to set up a 529 for my daughter, but I got involved in that. So while I may not have known as much as I should have, the "guarantees" being made didn't seem right.
by finallyinvesting
Tue Sep 20, 2022 11:29 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

Jack FFR1846 wrote: Tue Sep 20, 2022 8:48 am Chances are quite high that the relative, salesman said that gains are "tax deferred" and the grandmother HEARD that gains were "tax free".
More likely my grandma heard "Auntie M, I know you didn't trust anyone before, but you can trust me."

Fortunately with the 529 I was involved and didn't get taken. My great uncle, not so much - this same nephew invested $500K+ of my great uncle's money for his grandkid's college with Madoff. Makes for a lot of fun at family gatherings, that's for sure!
by finallyinvesting
Tue Sep 20, 2022 11:21 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

David Jay wrote: Tue Sep 20, 2022 8:40 am Income can be a great motivator. Nobody here will ever make a dime off of you.
I pay a number of professionals for their services. But I don't want to pay for services that are not in my best interest and are more for lining their pocket. I've been a lurker here for years and have learned so much - the main one being don't just take the word of someone who will make money off your decision to invest with them.
by finallyinvesting
Tue Sep 20, 2022 11:13 am
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

Rex66 wrote: Mon Sep 19, 2022 8:17 pm It actually depends on age of replacement and if underwriting was done.
I doubt any underwriting was done, or if it was it would have been very basic, because my grandma likely just filled out some basic information. There were no medical exams or physician statements. The first policy was obtained shortly after birth, then cashed out and moved to another company at about age 7, and then into this policy at NWM at age 11. I found out about the policy when was daughter was 12. My grandma just filled out some basic information to obtain the policies and when she passed away and I found the policy I just sent in a death certificate and a few other documents and changed the owner/beneficiary to myself.
by finallyinvesting
Mon Sep 19, 2022 7:48 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

This is one of those ideas that superficially makes sense--I mean it isn't false that you're locking in a low premium for life--but doesn't. For example, I had life insurance bought on me as an infant, and in the terms and conditions it says that no one under the age of five qualifies for the Preferred rate class, so it was rated standard. Another one of those is investing in a high dividend index fund, or individual dividends stocks, to increase your withdrawal rate because you can spend more without "touching your principal." There are so many not false things said by so-called investing professionals, I've gotten to the point that I'm more trusting of total strangers on this forum than any financial advisor. I know there are g...
by finallyinvesting
Mon Sep 19, 2022 7:42 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

retired@50 wrote: Mon Sep 19, 2022 7:10 pm
Someone deceived your grandma.

Regards,
After her death, I've discovered this more times that I expected. It's another reason why I want to educate myself.
by finallyinvesting
Mon Sep 19, 2022 7:39 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

So, overall, from me to you, I like the idea of using the money from your grandmother to benefit daughter. I note you have until the premium due date in 2024 to use the policy without paying any premiums. So, I would pick one of two paths. First, you could identify a significant expense to pay for in the next couple years, like part of college, a major trip, a used car, etc., and use the funds for that, with a clear explanation to daughter about the source of funds. Second, you could tell daughter that you want to use the funds (explain source) to start long-term savings for her in a Roth IRA, that it has significant tax benefits that are lost every year, and that all you need is for her to set up the account and tell you what her taxable ...
by finallyinvesting
Mon Sep 19, 2022 6:14 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Re: Whole Life Help on policy for my 19yo daughter

doobiedoo wrote: Mon Sep 19, 2022 5:47 pm Who is the beneficiary of the life insurance?
Why does your daughter need life insurance? I assume she has no dependents?
Currently, I am the beneficiary. My grandmother was originally the beneficiary but that was updated after her death.

Why does my daughter need life insurance? My grandma was told that buying life insurance on her new great granddaughter would make it inexpensive for the child later in life and she'd always have life insurance in case it was ever needed. So, while she's 19 now and has no dependents, my grandma was likely told that life insurance is a good investment to give.
by finallyinvesting
Mon Sep 19, 2022 4:12 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Help on policy for my 19yo daughter
Replies: 54
Views: 4193

Whole Life Help on policy for my 19yo daughter

Thank you all for your help in moving my IRA (but not really an IRA) from NWM to Schwab. I had asked about my daughter's life insurance before and y'all suggested getting an Inforce Illustration, which I now have. But, because I don't really understand it, I'm back for some insight. My grandma bought my daughter (her great granddaughter) a life insurance policy when she was born b/c her nephew was getting started at Waddell & Reed and while I'd like to say she wanted to support him, he totally preyed on her. Then he moved to somewhere else and told her to 'move' that policy - which we now know was a surrender and rebuy (hello commission #2). Then he moved to NWM in 2014 and had her 'move' the policy to NWM (again, surrender, rebuy, more...
by finallyinvesting
Tue Apr 19, 2022 10:21 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

exodusNH wrote: Tue Apr 19, 2022 12:50 pm
When I transferred my Roth from NWM, I initiated the process at Vanguard. There was no contact from NWM or other forms for me to fill out / mail.

I would suggest that your husband start the transfer from the brokerage he wants to hold the IRA. They'll tell you if there's anything they can't bring over.

Thank you for the update and good luck to your husband!
I started my transfer with Schwab and was sent snail mail paperwork from NWM to fill out. From everything I'd read on this forum I wasn't expecting NWM to send me paperwork to "confirm" my transfer. Thank you for the well wishes!
by finallyinvesting
Tue Apr 19, 2022 12:43 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

Just to post an update for those who were following along and for those who may come across this in the future: I rolled the NWM "IRA" product over to Schwab and despite NWM's requirement to physically mail in a hand-signed request, after initiating the request online and following all NWM instructions, it was relatively seamless. Once my money was in my Schwab account - approximately 28 days after the initial request - I bought the investment vehicles based on the 3 Fund Portfolio theory and now have full control over this money. It may not be a lot, but at least I can be a more involved decision-maker. While I got hit with nearly $1600 in loss due to whatever NWM was invested in - which they have still not told me - in the month...
by finallyinvesting
Wed Mar 16, 2022 11:30 am
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

I’ll offer some conjectures on your daughters policy. It’s a 7 year old whole life policy. At this point, the cash value is well less than the premiums paid to date. More importantly, the year by year growth in the cash value now is probably roughly equal to the annual premium, so the policy is treading water and not really growing. You can/should get an in force illustration to get the real facts. If my conjecture is right, you and DD would be well served to see if you can surrender the policy now, and recover the 3 remaining years of prepaid premiums. There might be a slight interest discount on the prepaid premiums. If you’re going to get rid of it anyhow so DD doesn’t have the burden of future premiums, I’d rather see you do it now ins...
by finallyinvesting
Tue Mar 15, 2022 1:02 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

Northwestern Mutual put 30-year-old me, with no spouse or dependents into a whole life policy. They've been sucking $261/month from my checking account for almost 18 years. I hadn't paid attention to it until I found this board. I'm currently counting the cash value of that policy as part of my bond allocation. The 3-4% per year is better than any nominal bonds of a similar safety level. I'm monitoring the account yearly now and expect to eventually surrender the policy. Sounds like a familiar story to my experience with NWM. I was able to get out of most life insurance with them, but I have one for my now 19yo daughter. That's a doozy of a story - my grandma bought her a life insurance policy when she was born b/c her nephew was getting s...
by finallyinvesting
Tue Mar 15, 2022 10:15 am
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

exodusNH wrote: Mon Mar 14, 2022 10:46 pm
So, it is an insurance product -- an annuity. The details of the deduction are buried in the 80-page contract you signed a lifetime ago.

Other than asking, you'll probably have no way to figure out what you might lose on the transfer out. But you'll almost certainly come out ahead in the long run.
Thank you for your insight about it being an insurance product. My husband didn't know it was an insurance product. And since he has one, too, it's probably best to get out of it now since he's 56.

I'm grateful for your help!
by finallyinvesting
Mon Mar 14, 2022 10:29 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

What exactly was the investment vehicle at NWM? Sounds like there was either a surrender charge or a market value adjustment. It was an Individual Retirement Annuity that originally was an SEP-IRA at Waddell and Reed because my family member started working at W&R and I wanted to support them. What was the annuity invested in? Equities or fixed income of some type? Here is the list of Variable Funds that are listed in the Redemption paperwork. Unfortunately, I did not monitor this account closely as my husband was the one who was "targeted" by NWM many years ago and the financial advisor was an expert level salesperson. The money was invested in a number of "Variable Funds" Domestic Equity Neuberger Berman Sustainab...
by finallyinvesting
Mon Mar 14, 2022 10:26 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

What date was the account opened at Northwestern Mutual? What date was the account closed out at Northwestern Mutual? Likely the loss in value could be due to a combination of commission/fees, surrender charges, and possibly a loss of market value if there was a drop in market conditions prior to the account being closed. On a related note I recently assisted a relative remove an excess contribution for 2021 from an IRA account. The contribution had been made in December 2021 and was just removed last week. Due to market changes they lost 14% of the principal on the amount of the excess contribution they had to remove for tax compliance. It was an Individual Retirement Annuity at NWM, which was rolled from an IRA-SEP at Waddell & Reed....
by finallyinvesting
Mon Mar 14, 2022 10:22 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

exodusNH wrote: Mon Mar 14, 2022 9:36 pm
I think they had you some sort of insurance product in your IRA.

I moved my Roth from them last year. I was in a handful of American Funds mutual funds. The "only" things they dinged me for were the $50 annual IRA fee and a $95 transfer-out fee.

You might have paid a surrender fee, market adjustment fee, or maybe had to return the "dividend" payment on the insurance contract.

It would be helpful to get a list of what's in your husband's account.
Thank you for sharing the fees you paid. I don't see those fees, but it's NWM so they may show up somewhere else.

Thank you for the suggestion to get a list of what's in my husband's account. I will definitely do that.
by finallyinvesting
Mon Mar 14, 2022 10:19 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

What were you investing in at NWM? Was it a mutual fund, outside of an insurance product? Or was it an insurance product, like an annuity? And what was the nature of the underlying asset? Was it one (or more) equity mutual funds? Or was it fixed income of some type? Without more facts, I’m guessing that the underlying asset was an equity mutual fund, that happened to lose value between the beginning of the contract year and the termination date. In any case, you’ve made a wise decision in leaving NWM. I hope that you don’t have any life insurance with them. Thank you for the support in my decision to move. We do have several life insurance policies with them. As with most NWM situation there's a story to that, which I will spare you from. ...
by finallyinvesting
Mon Mar 14, 2022 10:14 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Re: Question about Rolling Over IRA from Northwestern Mutual

Chardo wrote: Mon Mar 14, 2022 8:38 pm What exactly was the investment vehicle at NWM? Sounds like there was either a surrender charge or a market value adjustment.
It was an Individual Retirement Annuity that originally was an SEP-IRA at Waddell and Reed because my family member started working at W&R and I wanted to support them.
by finallyinvesting
Mon Mar 14, 2022 7:30 pm
Forum: Personal Investments
Topic: Question about Rolling Over IRA from Northwestern Mutual
Replies: 25
Views: 1941

Question about Rolling Over IRA from Northwestern Mutual

I'm a longtime reader and more of a lurker than poster. I've finally bit the bullet and moved my IRA (SEP) from NW Mutual to Schwab. Yay me! Instead of going into the story of why I didn't escape NWM sooner, of the positives that have come out of this pandemic was my decision to take a more active role in my finances since I turned 50. I've been investing a small amount in stocks at Schwab from money I started saving for my daughter 18 years ago and finally felt confident enough to do this transfer away from NWM. When I got the rollover statement I noticed that I didn't get the full value of my IRA sent to Schwab. Beginning Contract Value $26,6XX.XX Withdrawals - $25,0XX.08 Investment Return - $ 1,6XX.XX Ending Contract Value $0 Why did NWM...
by finallyinvesting
Sat Oct 23, 2021 10:56 am
Forum: Personal Finance (Not Investing)
Topic: Attempted identity theft
Replies: 11
Views: 2072

Re: Attempted identity theft

As the victim (survivor?) of 6 simultaneous account takeovers, two of which were successful, I'm glad you caught this before money was moved/taken. I can tell you from experience that the police and FBI will do nothing unless the bank pursues it. It took me almost a month to get my money back from Paypal. I know with 2 of the 6 accounts it was different people based on the data I was able to collect. On one account they made multiple transfers to their debit card but I was able to gather some information because I could still get into the account. On my credit union business account, they successfully made multiple transfers just under the $10K trigger to a bank in Los Angeles. If it weren't for my tenacity and a helpful representative in t...
by finallyinvesting
Thu Nov 16, 2017 10:21 am
Forum: Personal Finance (Not Investing)
Topic: Draft a will with legalzoom or other online legal help
Replies: 104
Views: 14427

Re: Draft a will with legalzoom or other online legal help

For most people a will is just fine because they don't have a complex portfolio of assets and the assumption is that the spouse survives. Keep in mind, though, that a will, when probated becomes public information. A basic will that leaves all assets to the surviving spouse, together with the suite of POAs (health care, mental health care, durable general) and the advanced health care directive shouldn't be more than $1,000. For the health/mental health POAs most state Attorney General websites actually have basic forms, which is great if you don't have them and you're not planning on paying an attorney for other estate planning services. A basic will that leaves all assets to the surviving spouse can be as simple as a handwritten (holograp...
by finallyinvesting
Sun Nov 12, 2017 4:40 pm
Forum: Personal Finance (Not Investing)
Topic: Draft a will with legalzoom or other online legal help
Replies: 104
Views: 14427

Re: Draft a will with legalzoom or other online legal help

Longtime lurker, first time commenter. I suggest hiring an estate planning attorney in your local area rather than using an online service such as LegalZoom. An estate planning attorney can draft a will and the other associated documents to help you minimize the tax burden on the survivors. In addition, a good estate planning attorney can discuss with you other options with regard to how assets are held. You may think a basic will would cover you but with a few million in assets you'll want to make sure the tax burden on survivors is minimal, that any minors are properly accounted for, and evaluate if other means of holding assets present advantages over holding them individually. As a business attorney, I'll tell you that a good number of ...