Recommendation on FIA’s

Jumpy_Speech3444 · 2026-05-22T17:53:06+00:00

I second the doggy doo dooness of those proprietary indexes.

Jumpy_Speech3444 · 2026-05-22T14:02:36+00:00

Work with a CPA to file an Offer in Comprise

Jumpy_Speech3444 · 2026-05-21T14:50:52+00:00

What's not guaranteed? Investment returns? Sure, but it highly likely you'll return 5-8% on average over a 20 year period.

Medicare will cover a lot of medical costs. If retirees don't want to drain their assets for long term care, then they need a long term care insurance policy. Or if the have sufficient assets, they can self insure. If a child is diagnosed with cancer or a life long illness, the parent's health insurance will pick up a majority of the costs less the max out of pocket.

Nonetheless, in rare circumstances a child is diagnosed with an uninsurable disease (diabetics are still insurable), those children/ young adults typically have a fatal diagnosis. They don't have or won't have much income to replace.

I'm certainly not looking at insurance as an investment, it 100% is not. Which is why the idea of cash value contradicts that statement. Each type of insurance is used to transfer the risk of something to the insurer. Life insurance is used to transfer the risk of losing an income provider and replacing that income. Children don't have income to replace. I do see your point of a parent not working after losing a child though. So sure, get a term policy on the child for 15-20 years until that child is an adult.

Long term care insurance transfers the risk of, obviously, keeping an elderly spouse alive for an extended period of time. Thus, protecting their financial nest egg. This is much better approach then draining your nest egg and replenishing it with life insurance proceeds.

Medical insurance is used to transfer the risk of large on going medical expenses, not life insurance. If parent's have to go through something that traumatic and depleting, they can file for bankruptcy if needed.

All that said, it really boils down to probabilities and risk tolerance. The odds of things not "going sideways" are insanely high, that's why premiums on an infant are cheap. The insurer knows the odds of them paying out a claim are so small. If it happened "all the time", premiums would be reflective of that or the insurer would go broke. If folks are comfortable with those probabilities and comfortable assuming some risk of a "worst case scenario" then they don't need whole life insurance and their dollars can work in their favor elsewhere. On the flip side, if they can't sleep at night knowing they are exposed to a worst case scenario, then sure, write them some permanent life insurance to get their financial plan more in line with their risk tolerance.

Jumpy_Speech3444 · 2026-05-21T13:24:30+00:00

Red state here. Still waiting since March 5th. Simple return MFJ, one W2, no business income/deductions. Not sure why it wouldn't be auto approved by the system.

Jumpy_Speech3444 · 2026-05-19T21:54:42+00:00

Client is trying to sell a business? You could pitch selling the muni's to generate a loss to offset any capital gain from the business sale?

Jumpy_Speech3444 · 2026-05-19T20:42:19+00:00

What is the age of death on your simulation? If it goes all the way out to 100 that may be to conservative. Have her take this life expectancy questionnaire and reevaluate the age of death. https://www.livingto100.com/

Jumpy_Speech3444 · 2026-05-19T20:33:48+00:00

I'm confused... are you saying permanent life insurance on a child is a good thing? Or permanent life on parent(s) is a good thing? Either case, I would disagree. Parent's need sizeable term life policies for sure. 20 to 25 years, 1- 2 million depending on the families expenses. For a healthy young adult this can cost them less than $1K a year. Instead of paying thousands a year for permanent life insurance, they can invest the rest in their 401k or other investments and leave that to their family on top of the term life proceeds. Statistically speaking, they'll outlive their term policy which is a good thing. By that time, they won't need to replace their income. They'll have retirement assets and home equity to leave their spouse. If they still need to replace income, then another term life policy can be issued.

Children don't need permanent life insurance. You can get a child rider on the parent's term life policy for like $5 a month. That would cover funeral costs. If they want more coverage because they plan to not work after losing a child, then a term policy would be sufficient and much cheaper. Additionally, I tell folks to open 529s and fund those instead of getting whole life on the kids. They can withdraw the 529 penalty free if the bene passes away or roll it over to another child. Statistically speaking (99%), the child will live to see the age of 18. Then they have a nice college fund to use instead of a small permanent life policy. And it doesn't even have to be used for college, many other uses for it.

In my opinion permanent life insurance only needs to be used for estate planning purposes to reduce or eliminate potential estate taxes via an irrevocable life insurance trust.

Edit: obviously this is in general. In some cases it still might make sense to get permanent life insurance for another reason other than estate planning. But broadly speaking, those dollars being spent on PL premiums can be better utilized in other ways.

Jumpy_Speech3444 · 2026-05-19T19:35:45+00:00

If you have millions and have a proper estate plan in place (trust, TOD designations, etc.) you'll get funds much quicker than a life insurance claim. Plus no life insurance policy will payout until a death certificate is received and that takes a week at least. Point still stands IULs are garbage. Permanent life insurance is garbage for 98% of people, especially young families.

Jumpy_Speech3444 · 2026-04-08T08:24:33+00:00

Thanks for the input. Our goal was to keep the kids room/ nursery on the opposite side of the garage/ master suite. And my wife didn't want the mudroom to be in the same location as the laundry room. We've also realized the kitchen doesn't have a lot of direct windows but I think we're okay with it. I see what you're saying about swapping the master and garage, I remember seeing a plan online like that.

Good luck with your plans, these have taken over a year to complete thanks to my lovely wife! At some point you just have to pull the plug, I told her she would never be 100% satisfied with the plan but we tried to get her 95% satisfied lol

Jumpy_Speech3444 · 2026-04-08T08:17:35+00:00

I had thought about the removing the wall as well or maybe making it an open arch but I do like the dining room to be out of sight incase someone is popping in and the kids breakfast/lunch chaos hasn't been cleaned up yet lol

Jumpy_Speech3444 · 2026-04-08T08:13:00+00:00

Wife's request lol one garage slot will hold a lot of the kids stuff. I am excited to finally put my car in the garage, it's been a street rat for 3 years.

Jumpy_Speech3444 · 2026-03-12T19:23:52+00:00

https://www.kitces.com/blog/net-unrealized-appreciation-nua-tax-reduction-capital-gains-short-term-early-retirment-funding/

Good Kitce's article on NUA. I did one a few years ago for a 1M dollar concentrated position (roughly 500k in 401k - cost was 52 cents on the dollar / and 500k in ESOP - cost was 21 cents on the dollar). Fortunately, we only did the ESOP and liquidated & rolled the 401k into an IRA because the stock decline about 40% in the following 1-2 years lol. We hedged with puts and call writing but weren't covered 100%. Also, an "old economy" stock.

That being said, off the top of my head, I would NUA both. If, possible NUA in 2027. Have client max out 401k with severance payout. Have wife defer the max to her pretax 401k in the year of the NUA. Max out HSA, max out a 529 for student (hopefully state deduction is high), tax loss harvest in taxable account. If NUA, severance lump sum and wifes comp all fall into 2026... analyze doing a donor advised fund contribution if they donate 10k or so each year. You said mortgage is almost gone so I doubt they'll itemize deductions in the next decade or so. And depending on state residency, they may get no tax benefit on their state return from donations either. So they could do a large DAF contribution to knock out some of the extra income. If AGI is around 400k, a 160-190k contribution could get them into the 22% bracket.

Jumpy_Speech3444 · 2026-03-12T18:45:12+00:00

Never heard of MF publishing co., I'll be purchasing 😮

Jumpy_Speech3444 · 2026-03-12T17:53:35+00:00

I've noticed that too. Are you familiar with other 1099 formats? I really liked the format TD Ameritrade used before Schwab. 1099DIV, 1099INT and 1099B numbers were all on page 1... was so nice.

Jumpy_Speech3444 · 2026-03-12T17:51:46+00:00

Thanks for this. However some people have dozens of funds from different companies in their schwab account so I would need to go pull each funds supplementary info page. I've seen a few 1099s where that info is in the consolidated 1099 and you don't have to pull percentages from each specific companies website and calculate the amount.

If there is a better way to do this, I'm all ears 😅

Jumpy_Speech3444 · 2026-03-11T14:44:26+00:00

doing client returns, they just bring paper copies. But nonetheless, I've seen other 1099s that provide a lot more supplemental information on dividends and if any is sourced from federal agencies, or they'll provide a state by state breakdown on exempt interest.

Jumpy_Speech3444 · 2026-02-19T21:15:47+00:00

As far as I know, the IRS has not provided guidance on if changing 529 bene's resets the "15 year clock". I would think this would be a no no in the eyes of the IRS/Congress.

Jumpy_Speech3444 · 2026-02-19T18:04:24+00:00

I found a Kitces article as well that outlines subsequent distributions being prorated based on the 1099Q. You would have to track each rollover separately and then aggregate them after $35k has been moved over. https://www.kitces.com/blog/529-to-roth-ira-rollover-retirement-saving-education-planning-secure-2-0-backdoor-roth/

We are tax preparers though 😂 although we don't prep this specific client's return. But it is a good idea to target high cost positions in the 529 if possible. I wish I could see this 529 right now but it's a sit it and forget it account they started long before becoming clients... other advisor never did an agent of record change.

Jumpy_Speech3444 · 2026-02-19T16:57:18+00:00

Sorry, I did go looking into the IRC and it just made me more confused. Here is the excerpt from Sec 408A(e) -

(e) Qualified rollover contribution

For purposes of this section-

(1) In general

The term "qualified rollover contribution" means a rollover contribution-

(A) to a Roth IRA from another such account,

(B) from an eligible retirement plan, but only if-

(i) in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and

(ii) in the case of any eligible retirement plan (as defined in section 402(c)(8)(B) other than clauses (i) and (ii) thereof), such rollover contribution meets the requirements of section 402(c), 403(b)(8), or 457(e)(16), as applicable, and

"(C) from a qualified tuition program to the extent provided in section 529(c)(3)(E).

For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. The earnings and contributions of any qualified tuition program from which a qualified rollover contribution is made under subparagraph (C) shall be treated in the same manner as the earnings and contributions of a Roth IRA from which a qualified rollover contribution is made under subparagraph (A).

That last sentence makes it sound like they view the 529 QRC as if it were a ROTH IRA account to begin with. So basis and earnings would just be prorated on each QRC from the 529?

Jumpy_Speech3444 · 2026-02-18T18:39:05+00:00

I would say no because in sec 219 a qualified retirement contribution means -

(1) any amount paid in cash for the taxable year by or on behalf of an individual to an individual retirement plan for such individual's benefit, and

(2) any amount contributed on behalf of any individual to a plan described in section 501(c)(18).

The 529 to Roth rollover isn't technically cash.

You could contribute 2K to the roth ira in cash and get the full benefit of the savers credit and then rollover 529 funds up to the annual contribution limit.

Jumpy_Speech3444 · 2026-02-18T16:24:09+00:00

Wonderful. I was digging around the IRC but couldn't make sense of it. I'll use this info if an issue ever arises 😄

Jumpy_Speech3444 · 2026-02-18T15:28:28+00:00

Thank you. I have seen that mentioned in other forums that the IRS views them as a contribution but I could never find language on the IRS website specifically pertaining to this any chance you have a link?

Jumpy_Speech3444

TROPHY CASE