It might be that we started paying in sooner. I’d have to go back to the files to see what ages we started. (I do know we got husband’s first, added mine a few years later… at a younger age.)
1 Like
There may be a time when the company offers you a ‘buy-out’ of the policy. Ours has offered us buy-out several times.
1 Like
Hoping it offers a buyout, as long as it’s a good offer, we would consider it. But since we already took one of their reduced deals, DK if they will offer another. Then again, they may see us as willing to be flexible with our policy?
@Jolynne_Smyth, we definitely have been thinking about helping both of our kids in the ways that will help them the most. The only time with ShawSon was early. He was raising capital for a startup when he was a senior in college and I invested (along with the dad of his best-friend/co-founder). I think we thought there was a chance we would make a return on investment but I thought of it as helping establish himself. The company is remarkably still running but has not generated a return. However, ShawSon was admitted at age 23 with only one year of work experience at probably the best business school in the country to do an MBA and a MS in a tech field in part because of how he described his role at the startup. With ShawD, we have helped with buying her first car and with her house purchase. But, twenty years ago, a dynasty trust was formed. Any savings we don’t use will go to our progeny. [We have money in a DAF and can use the 401k for charitable stuff.]
When ShawSon was in SF and ShawD was contemplating moving there, I tried to convince ShawWife to move to Marin County (which I love for weather and beauty and hiking and sculling). When it became clear that I failed, ShawD decided to move back east to be near us.
My “retirement” has involved trimming down my company so that I don’t have to worry about feeding mouths, only taking on engagements I’m really interested in, and upping the success fee aspect of our fees. Success fees all go to the dynasty trust and hence to the kids. In addition, I am forming two new businesses that will pay me some for my labor but will pay more for IP and/or success fees. These grew out of a pro bono project, but we concluded that one could only accomplish our societal objectives by harnessing the need for investors to get risk-adjusted returns. If it materializes, all of that income would go to the kids and possibly their kids.
Our first focus was getting them through their education with no debt. Done. The next was helping them get set up in their professional careers. Done. But, ShawD is completing a second masters and will leave primary care to start a private practice in psychiatric mental health. I’m happy to help her establish her business. Third is housing. MIL and we have helped ShawD with downpayment. ShawSon and wife have not looked at buying. If they need help, we would do so. Fourth would be grandkids’s college fund (no grandkids exist yet). Probably fifth would be other things for grandkids.
What we can fund depends upon returns and how much additional money I earn. In principle, we will be able to fund everything with the possible exception of other things for grandkids without anything heroic happening. If the latest venture succeeds, we would probably be funding for generations, but who knows.
2 Likes
I understand your reluctance to take distributions from the IRA, but for most of these you must take 100% distributions within 10 years, so the pain is inevitable and is generally easier taken gradually than deferred.
As for the appreciated stock, unless you have highly significant other income, a good portion will be taxed at 15% (plus potential 3.8% NIIT).
Of course taking income either route risks pushing you over IIRMA cliffs, which isn’t fun.
Seeing that the IRA distributions don’t trigger NIIT, and presumably must be harvested in the the short term anyway, it seems you might want to be consider taking some of that income if you’d like to access to the money for gifting.
3 Likes
Perhaps @sabaray can clarify, but my impression was that these IRAs were for THEIR beneficiaries.
My interpretation was that @sabaray is the beneficiary, and this is most likely an inherited IRA.
1 Like
My financial situation is complicated. I am the beneficiary. I am taking the RMD as required and completely understand the need to exhaust the account within 10 years. I am not looking for advice. Thank you.
3 Likes
We declined an inheritance from my mother in law, allowing our kids to get it instead. My husband’s brother did the same. This is a way around any generation skipping taxes since it’s not in the will. The 4 grandchildren took equal shares. This gave the kids a nice chunk to buy a home someday.
6 Likes
IRMAA doesn’t feel like an issue but when you are a widow half of that income doesn’t feel like much.
Definitely a first world problem
3 Likes
Thanks for all the additional thoughts on the ‘possible need to help adult kids’ and a retirement decision.
The parents here are so dedicated - I appreciate the perspectives.
I’m getting more comfortable with the ‘you will always have a home with us whenever you need’ type of support going forward (my parents also did this for me).
We have also incorporated a bit of extra ‘help support younger kid’ money into our retirement plan (for living expenses) if she goes to law school. But not planning for contributions to grad school tuition - especially since older kid never got the full college funding (he didn’t go) - it would seem kind of unbalanced.
5 Likes
We gifted our kids what is a lot of money for us, and still seems like a lot of money! This was a one-time thing, designed to gift DS and DIL a cash amount equal to the 50% land value portion gifted to DD and DIL. (DD and DIL, DH and I, we collectively own a property that now holds their house and our ADU.) This allowed both of my kids to get nice houses in nice areas, with more reasonable sized mortgages. Added bonus…we all moved to the same small town area in MA, and the grandkids are next door or 13 minutes away. The gift was made possible by the sale of our house in a high COL area in Texas.
We are so happy to have been able to make those gifts, and, now that the building and landscaping, solar panels, basement remodeling, etc, is all done, we shall be returning to our frugal and low-cost lifestyle ways!
15 Likes
That sounds fabulous @anxiousmom. I hope you are anxious no longer. Our home has an ADU (attached 4 room / 2 bathroom in-law suite). When we get older, we’d love to have ShawD and family move in. Alas, we have not moved to a low COL area – we are in a high COL part of MA. If ShawSon and his wife would every move back, we would love to help them buy one of the houses on the street. There is a beautiful house hidden in the woods across the street from us that borders the same conservation land we border and is owned by an elderly couple. We are keeping an eye out for it. Then we could have both kids nearby as well.
I think we’ve strayed from frugal and low-cost lifestyle.
4 Likes
I think that’s is perfectly fine at this stage in life. If you have the means to splurge on things that are important to you/spouse, why not?
6 Likes
I am trying to convince D1 to buy a brownstone, so I could live on the ground floor (no stairs), she could have 2 floors and D2 could have a floor. She is not a buyer of the idea yet. 
9 Likes
What you are really looking at are the few steps down to a small apartment. The steps up on the brownstone go to the main living. A HS classmate and his wife bought one in West Harlem (close to a metro line, like half a block) - they had dug out a lower-level basement (with back stair access for main homeowner for game room/man cave), and the main homeowner had two large floors with 5 fireplaces. This was purchased for a terrific price around 2004. The wife wanted to be near the grandchildren in WI, so after all the improvements and renting out all of it (a NY Yankee team member rented the main living areas), they sold it for a tidy profit. I saw it when I was in NYC and met up with them, while it was still undergoing renovations and his company had them in a hotel.
I know two couple who have married after being widowed or divorced and are later in life. Also have been listening to the attorney that handles a lot of NYC big divorces and talking about pre-nup agreements. Pre-nup for marriage ending either in death or divorce (as all marriages end one way or the other) - and want each to be able to live properly after either.
I certainly have a perspective for these write-ins.
1 Like
@oldfort, I love the idea. When ShawD was 22 and getting ready to graduate from NP school, she said, “Dad. I have a deal for you. I’ll move to Boulder, CO and get an NP job. I’ll scout out the neighborhood and after a year, you’ll help me buy a two-family house. You and Mom can live on the top floor and I’ll live on the bottom floor. When I have kids, you and Mom can help me take care of them. When you get older, you can move to the downstairs unit and I’ll take care of you.” She knew that I have a very close friend in Boulder and love the mountains. I said, “You have a deal.” She was going to move to CO with her best buddy from NP school, who found a BF and move to someplace like Maine. So, Boulder never happened. ShawD has indeed purchased a two-family 20 minutes from us with some help from her grandmother and from us. But, our current house is configured for two-family living (with some integration – the main house kitchen would be harder to give up and the gym is on the in the main house unit so we’d have to figure out how to deal with that). So, I’m still hoping for that deal. ShawWife would probably be the best grandmother ever. The only thing we would have to worry about is how to fence off access to the river so kids did not inadvertently fall off the small cliff into the river.
7 Likes
Yes, definitely fence off the river. I have a grandson and he’s quite physically adept, exceeding his judgement (at least at his current age of 22 months).
1 Like