As a young guy, Ive never looked into life insurance. We get the default $400k life insurance through military service and I've honestly never thought about it. Thank you.

In your opinion, is there any specific clauses or terms I should look to include/exclude in life insurance?

The only courses of action are to pay the shop the money in full and to sue the shop. They have a mechanics linen on it because your parents authorized work before getting approval from the warranty company.

How much time do you have left on your visa? Does your employer provide any match to your 401k?

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Have you already hit the max or on track to hit the max on all of your available tax advantaged space?

Have you read the Prime Directive? Have you seen the Flow Chart?

• https://www.reddit.com//r/personalfinance/wiki/commontopics

Once you've done all that...

u/billthecatt has arguably the best answer to this question linked and pasted below:

• https://reddit.com/r/personalfinance/comments/ub71n3/how_to_set_up_an_investment_account_for_my_kid/i629d25

Typical kid options:

529 - Great for college/education, but not all kids go to college/private schools, etc. More Details here: https://old.reddit.com/r/personalfinance/comments/mq0rjb/information_about_college_529_savings_plans/

UTMA (Custodial) - Invest on behalf of the child, Pros - lower taxes (assuming amounts don't get too high, see below), fewer restrictions on usage than 529. Cons - Is the child's money, so no takebacks. Minor takes full control at the age of termination (varies by state, typically 18 to 21). Also, will reduce/impact financial aid for college. You should tax gain harvest this type of account (realize gains periodically, while in the 0% tax bracket).

IRA (Roth/Traditional-Custodial) - Cons: Requires earned income, which most minors don't have or have much of.

Normal investment account in your name - Cons: Probably higher taxes than UTMA, Pros - you keep control

HYSA - Pros: Won't "lose" nominal value, low risk Cons: May lose out to inflation.

CD - Pros: Like HYSA, but with guaranteed returns over investment period. Cons: May lose out to inflation.

I-Bonds: Currently high-yielding bonds that can be purchased in accounts for minors: (up to $10k/year; interest changes every 6 months) /r/personalfinance/comments/qprqpy/ibond_questions_answered/

The first 4 options (529, UTMA, IRA, investment account) are account types that allow for investing based on your time horizon. If your child is young, a more aggressive investment mix may make sense for you (Stock ETFs/funds), and you may want to shift to a more conservative mix over time, depending on your goals for your child(ren).

More information:

UTMA Kiddie Tax Info: https://www.marketwatch.com/story/the-kiddie-tax-is-getting-easier-and-maybe-cheaper-under-the-new-tax-law-2018-05-24

UTMA Taxes: In general, in 2020 the first $1,100 worth of a child's unearned income is tax-free. The next $1,100 is taxed at the child's income tax rate for 2020. Anything above $2,200, however, is taxed at the marginal tax rate of the parent(s), which usually is higher than the child's rate.

Overfunding a 529 isn't so bad: /r/financialindependence/comments/hqexle/oversaving_in_a_529_is_a_much_smaller_problem/

I'd suggest starting with the retirement predicaments wiki page. Go through all of that. You'll need to gather more information and you'll want to do some reading (I'd especially recommend How to Make Your Money Last by Jane Bryant Quinn), even if you convince your parents to hire a financial planner, it will help you pick an advisor and review what they're doing.

I would worry somewhat less about advanced tax planning, using the right tax-advantaged accounts, etc. and more about your parents simply not saving enough money.

As far as a financial planner goes, what you want is a fee-only CFP. Read the financial advisors wiki for more information. If your father is amenable to the idea, I'd suggest interviewing a few candidates (probably over a video call these days) with you on the call.

No, not at all. The child hasn't been born yet. Given the fact that I'm military, our taxes are relatively low due to military pay.

I've never had to worry about maxing tax advantages, which has inevitably lead to screwups on my part with short term gains on my own brokerage account. I am keenly aware that once my wife and I transition out of the service tax advantages are going to be more important.

Thank you for this post. I will go through all of these resources.

No, your IRA balances are considered separately for pro rata. The conversion / pro rata impact is calculated on Form 8606, which begins:

"If married, file a separate form for each spouse required to file 2022 Form 8606"

It sounds like you are happy at your current job. My husband could get paid much more if he switched to a private company versus his public service company. He doesn't want to. I can't force him to.

Honestly, your job sounds amazing and I'd love a job like that. I'm a teacher. Unfortunately, I'm in an area where I'll never see the increase we should receive.

Once kids are out of daycare you'll feel much better financially. I have twins as well (& two older kids). Paying daycare for twins is a lot. I felt like I got a 10k raise when they went to school. I never paid summer either and prices are much higher now.

Wait, one more question. In January 2023 would I be paying for: January 2023, February 2023, March 2023 (what I think I’ll earn) - - or do I skip January 2023 and in April 2023 pay for what I did actually earn in Jan-March 2023?

I think it’s the second one.

Public colleges are normally less expensive for in-state kids.

I have two college age kids. One thing that really surprised me is that most colleges appear to give pretty much everyone aid, scholarships, etc. that significantly reduce tuition cost. Almost no one pays the "retail rate" you see on the college website as tuition cost. It's kind of like the hospital that charges $20 for an aspirin but no insurer ever pays that $20.

Bunch of articles like this one from a few months ago about a trend of colleges toward slashing their tuitions to more accurately reflect what they actually look to get.

You write a will. You state that you have a sister [Name] and that you are not leaving her anything. You say that your entire estate is left to [CharityName]. You name someone to handle your estate, typically called the executor.

Create a folder or binder that is clearly labelled “estate plan” or “last wishes” or “on my death”. Put that folder somewhere obvious, like in the front of file drawer. Put your will in it.

The executor pays any final bills, notifies heirs, and gets house ownership transferred or sells house and sends charity the proceeds.

Other things for your folder: Documents that will help your executor find your accounts like bank statement and voided check, 401k statement, electric bill, etc. Mine includes a list of people to notify of my death, a draft obituary, and a note about finding my passwords.

FYI, you need to name your closest relatives and specify that you are not giving them anything or are giving them a very small amount. Otherwise, they can challenge will on grounds that you forgot them.

Keep note that only the gains portion is penalized and taxed.

• https://old.reddit.com/r/financialindependence/comments/hqexle/oversaving_in_a_529_is_a_much_smaller_problem/

Personally, I'll be looking into taking a culinary class in France (or similar) if I can't figure out how to use up the rest of the 529 funds.

At 136k income, every dollar you put into a traditional 401k, you're guaranteed to save 24 cents on your tax return.

People often think "well taxes might rise in the future so I could pay more than 24% in retirement"

There's almost no chance. Here's why.

When you pull out, let's say, 80k to live on during retirement

That's currently the 22% marginal bracket. But heck, maybe for whatever reason, congress decided low and middle class Americans (income 41k-89k) need to pay a lot more taxes. They up it to 30%. Dang, my traditional 401k was a mistake! 30% is higher than 24%.

But guess what. You don't pay 30% on all 80k, because that's not how taxes work. Ignoring social security here for simplicity:

First you get a standard deduction and pay 0% on the first 13k.

Then you pay 10% on the next 10k.

Then you pay 12% on the net 30k.

Then you start to pay the 30% on the remainder.

The effective tax rate you paid on that 80k withdrawal is around 15 cents per dollar. If you had used a Roth 401k you would have paid 24 cents on every dollar.

Congress would have to pass very significant tax increases on the lowest income Americans for the traditional 401k to become a bad option -- or, you end up with a bunch of ordinary income during retirement which skyrockets your effective rate.

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I don’t use it, and quite frankly I’m so new here I don’t even know if I can forgo it. Any suggestions are welcomed. I may reduce my 401k to $150 per pay check as opposed to $300 rn

Thanks for taking the time to put this comment together. Very helpful.

Thanks for the suggestion, much appreciated!

I think the point they are trying to make is that two equivalent companies with shares currently worth $100, one paying a 4% dividend and one not paying any dividend, with both experiencing a 5% profit growth over the year, the dividend-paying company would pay you $4 over the course of a year and be worth $101 per share at the end of the year, while the other company would be worth $105 a share.

Well that’s a long process. And if doesn’t work out you will need to go back. But again, if not certain, why you contributing to 401 and fsa? If you withdraw money early you pay taxes and penalty. Fsa use it or lose it. Do you use it?

This is very helpful and eases my worries. Thanks!

Okay, I looked at the 457b plan and I told you guys I was dumb lol So, you do invest it.

But you have to pick your own investments and that makes me really nervous. How do I know the percent to contribute to each fund? Or pick which funds to do at all? Ahhh!

Also getting mixed answers when reading about whether to focus on the 457 versus a Roth IRA. I’m thinking the 457 would be more beneficial to me since it doesn’t have withdrawal restrictions starting at age 59.5 like most retirement accounts. Sounds like if/when I separate from my current employer, I could take that money in a lump sum, pay taxes, and decide what to do from there.

Noisy neighbors are another reason why I am not too keen on renting an apartment.

Does your friend have to pay for health insurance at their job/pay less? Some jobs pay 100%/90%

Term life to protect yourself and child against you suddenly dying/losing ability to work. We're going through same. Have a 3.5mo and set up living will, trust etc to avoid contesting of assets should we kick the bucket prematurely.

Our FA told us we were way underinsured for our annual cost of living and should something happen (permanent loss of income through death or disability) we would be screwed. We have life ins via work but the payouts only like 100k which is frankly nothing over the course of expected income/finance costs over decades (funeral, mortgage, college fund etc).

We thought about setting up a 529, but think maybe a traditional investment might be better (no restrictions on what to spend on), We'll probably not put too much in a 529

Suggest talking to estate attorney as they'll have a lot of good questions that you'll want to answer around assets, distributions etc and go through some basics should something happen to you.