Of course he did. The commissions on whole life are huge – ~50% of premium in the first year or so. Glad to see that ‘ex’ part. 
Like others, already dropped one term policy. Will drop the other soon.
@websensation - does that $3 - $4 million “in the bank,” literally mean cash? Or total asset value?
We dropped all the term insurance when D2 graduated from HS. I have a universal life policy that will fund S2’s trust when I die. He has autism and won’t be living independently ever.
My term life expires in about 7 years, and I won’t renew. I bought a 20 year policy when my kids were still here and our mortgage was high, so husband could afford to keep the house if I died.
Now I hear one way to get OK LTC Insurance is by using a whole life product, where you can use it for LTC if you need it. So far we are LTCself-insured, which may be stupid.
We too are mostly “self-made.” I have an inheritance from a dear friend, but I haven’t spent much of it, and don’t count it as “my” money. But if we needed it for LTC, I would certainly use it. My hope is to leave that money to my kids, but if I need it I will use it.
This was a useful discussion of insurance that was inspired by a typo caused either by GBoard or Apple Auto Correct. I meant to say selling the country house will be the only inheritance they get but it somehow got corrected into the only insurance they get. But, I think it is useful talk about insurance itself.
We had term insurance which is now expiring, but also had whole life insurance inside a Defined Benefit Plan that was originally a 412i and then became a 415i. The insurance industry had done a bunch of lobbying, it seems, and if you put a whole life policy inside the DB plan, your annual cap on investment was artificially high because the deemed interest rate you were going to earn was set artificially low. The law or regs changed over time and there was essentially no annual cap as far as I could tell, but it turns out there was a total investment cap. When I hit that, I let the insurance go rather than purchasing the policy out of DB plan. I am also letting the term insurance expire. ShawWife is very risk averse and so she needed to hear from our financial advisor that if I died, she would have enough money to live on. And, the kids are no longer relying on me for financial support.
The original point of my thread, which I am still pondering, is my BIL who says all he cares about is making himself and his wife happy and they expect to leave nothing but the country house to the kids while I am making sacrifices for my progeny with, in fact, tradeoffs for us – for example, we could buy a very expensive home but I don’t want to spend more than our current home/studio cost us.
@dentmom4, if one of my kids had disabilities or diseases that meant they couldn’t support themselves, the structure we have (a dynasty trust with instructions to the trustee to take care of the health, welfare, housing, employment etc. of us and then our progeny) would work, but I think we would have much more specific language probably like that which is in your trust.
On LTC, I think we talked about this earlier in the thread @1214mom. In the old days, LTC insurance actually paid for LTC. When I look, you are really self-insuring anyway as the cap on what they will pay is sufficiently low and the premium sufficiently high that it doesn’t make sense to purchase the insurance. Maybe others have found different policies.
@websensation, I haven’t yet paid off the mortgage on my house – the interest rate is low and I’m doing better than that in my investments. But the LTV ratio is probably 8% so I’m not too worried. But, I’m with you. I’m shooting for a bigger number in terms of net worth, but that would include rental real estate as well, stocks and bonds, and alternative investments. My issue now is that I have hit my number except for the fact that about half is in qualified plans and that money is worth only 60% of its face value (to me, could be worth more to others). So, I’m not done.
@shawbridge, yes, we have a very specific special needs trust set up for him. S1 and D1 have both offered to house him when we can’t, but I suspect that he will live with D1 as FSIL also has a brother who won’t be able to live alone (also on the spectrum, higher-functioning, but more complex social issues).
@shawbridge , do you mean that taxes on your qualified plans will be about 40%? When we were trying to figure out our target number, we looked at it like “what salary would we need to be earning to cover our expenses including taxes?” , because about 90% of our nest egg is in qualified plans.
@dragonmom, yes. I meant that the marginal tax rate would be 35% or 37% plus 5% for the state, so really 40-42%. Thus, the funds in qualified plans are really only worth 58% to 60% of the face amount. So, time for a little more savings to hit my target number post-tax.
Given that we’ve added $1 trillion (I think) to our deficit this year, I suspect tax rates will be going up at some point in the future.
Or government services will be cut. Meaning, it would be better to plan for retirement with a worst case assumption of no Social Security or Medicare (and yes, self-insuring medical costs in old age means have another few million dollars saved just for that). The Baby Boomer generation probably has enough voting power to kick that can down the road until after they are dead, but Generation X and Millennial generations will probably have to pay (more taxes or forego government services) to clean up that fiscal mess.
OTOH, perhaps the Millenials and Gen X’ers will call our bluff (of can-kicking) and let the auto cuts to SS go into effect in 2035. Maybe they think us old Boomers will be to out of it to notice. hahahahaha
“selling the country house will be the only inheritance they get” - Funny typo/insurance, but good tangent discussion. I actually think that what they plan is reasonable. What you are doing is really generous, but it’s certainly not an obligation.
Back in reply #15547…
Even the top 5% (whether in reference to income/wealth, career achievement, or kid academic achievement) in the US seems to be pretty anxious (about not being good enough in some way relative to goals), based on what people post in these forums (admittedly, probably a biased self-selected sample).
For those with kiddos working for startups:
^^
And his advice was 100% wrong. But I’m sure he racked up plenty of fees for his bad advice.
Just a heads-up to those who have ‘professional advisors’. Sometimes its just better to do your own homework, at least for simple cases/estates.
The key word is “accountant.” For estate planning, use a reputable T&E tax attorney. These are not your run of the mill lawyers. They know accounting and math and the ever changing tax code.
Why do people assume that having a lot of money necessarily means that it is more difficult to manage?
Yes, there are account insurance limits from FDIC and SIPC to consider, but it is not like one has to put money in more exotic hard to understand investments just because there is more of it.
The type of assets matters, UCB. Some assets like ISO come with many restrictions, and the rules applicable to those assets can be quite complex. As the linked article demonstrates, the difference in taxes alone can be quite significant. There are a couple of posters here that have equity in startups… something to pay attention to.
The other day a friend mentioned possible complications trying to transition from Cobra (spouse) to Medicare . I had assumed it would be same as transitioning from employer plan. Any thoughts or good links to help me research this? (Doing some long term planning on various scenarios).
@colorado_mom - I think this was addressed previously on this thread, but it is so long and unwieldy, it would be impossible (at least for ME) to find its mention.
Here is one article I found that outlines what I remember the issue to have been - the risk of paying a penalty.