One Savings Vehicle, Unlimited Uses
Posted by: BeamaLife Editor on 26 Apr, 2010
A recent article in The Wall Street Journal advised readers to “beware rule changes on Coverdells.” Coverdells Education Savings Account, in case you’re not familiar with them, are investments that offer tax-free growth and withdrawals, as long as the money is use for qualified educational expenses. They were once known as education IRAs, and sometimes they’re still referred to that way, although the money that goes into them is not deductible from taxable income.
If you’re a parent who already owns a Coverdell, the article continued, you should be aware that there is good news – you can invest as much as $4,000 until April 15th, since the money deposited before April 15th counts towards the previous year’s (2009) limit. And, there’s bad news. Unless Congress extends the current benefit, starting next year withdrawals that are used to pay for expenses from kindergarten to 12th grade will no longer be tax free.
That doesn’t mean that Coverdells are bad investments, of course. They’re still a good way to save for and finance education in the United States. Even with their limitations, such as the fact that beneficiaries must be under age 18 when the money is contributed, and that the money can’t be refunded to the person who started the account, they’re still better than doing nothing.
But there is one savings vehicle allows you to tax-free growth and withdrawals without those limitations. Imagine being able to contribute what you wanted, when you wanted, without any limits. Imagine being able to use the funds for any level of education, for any member of your family – even yourself! Imagine the funds not all being needed, and the overage being returned to you, the person who created and funded the account. Imagine even being able to pass the funds along to your heirs in the event of your death.
By now you’ve probably figured out what savings vehicle I’m talking about. It’s whole life insurance, of course. And not only can it help you to save towards and fund your children’s educations. You can use the money for any other purpose you choose as well. Many types of life insurance policies have loan provisions that allow you not only have tax-free growth of your capital, but also to borrow tax free against the balance of your account. For education, or for whatever other purpose you choose.
Life insurance is the only savings vehicle that I know of with so many uses – including the most important: making sure that in the event of your death, your family’s financial needs are completely taken care of.
The Best of Times for Baby Boomers?
Posted by: BeamaLife Editor on 19 Apr, 2010
Your retirement years are supposed to be the best – a reward for all of the years of hard work and sacrifice that you’ve put in. You should be spending your days the way that you want to – seeing friends, enjoying your grandchildren, doing all the traveling that you put off while raising a family.
But an article I read recently shows that for baby boomers, there’s a dramatic rise in mobility-limiting disabilities. The upward trend for baby boomers is shocking, because for adults 65 and over, the number of disabilities is actually declining.
The study on which the article was based found that 40 percent of the people age 50 to 64 reported having trouble with at least one of nine physical functions that were surveyed. These are basic things we do every day, like bending, kneeling, climbing 10 steps, or walking a quarter of a mile. In addition, more baby boomers are finding that they have to rely on special aids, like canes or wheelchairs, than ever before.
The researchers weren’t really clear on the causes of this alarming increase in mobility-related disabilities for baby boomers. More and more people are reporting problems with back and neck pain, and there’s a national epidemic of obesity that I believe is part of the problem as well. Heart disease, diabetes, nerve, muscle and joint problems can all be tied back to poor diets and lack of exercise.
But whatever the reasons may be, one thing is clear: this trend will have consequences that extend far into the future. And that’s because, in general, we don’t get healthier as we age. If we’re having big problems earlier in life, it’s to be expected that those problems will only get worse with time. There will be an even greater need for disability coverage and for long term care coverage in the years ahead.
I once heard a speaker give the following advice: do what you have to, as fast as you can, so that you can do what you want to as long as you can. If it’s time to make some changes in your personal life, like eating better, or getting more exercise, the best day to begin is today. And if your financial life needs some work, the best time to begin that is today, too.
Do you have your own disability income insurance policy? Do you own long term care insurance? The need is there, and the best time to secure your future is today.
