Episode Transcript
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Speaker 1 (00:00):
You worked hard for your money, but do you know
how to make it work hard for you. You need
a team with experience, vigilance, and a strategy to help
you live the retirement you deserve. Find your financial safe
haven with Haven Financial Group. Today, you're listening to the
new and improved Haven Financial Group Radio Show, where we
bring you comprehensive weekly financial wisdom from the professionals. It's
(00:23):
all about helping you solve retirement problems so you can
make your nest egg last. Your tune to the Haven
Financial Group Radio Show with your host, Larry Kolvig and
Kim Karrigan your guides to weekly retirement confidence. If you're
interested in protecting and growing what you have, let us
be your financial safe haven. The phone nines are always
(00:43):
open at six point two five four eighty four hundred.
Now get your financial questions ready because the Haven Financial
Group Radio Show starts now.
Speaker 2 (00:54):
Good morning, and welcome to the Haven Financial Group Radio Show.
I'm Larry Kulvig, founder and CEO of the Haven Financial Group,
on with Kyle Thomas, certified Financial Planner, and the investment
team as well Kim. We're going to talk about college
planning and family planning and all kinds of planning. And
it seems like we talk of planning every week, don't we.
Speaker 3 (01:14):
We do, we do, and that's a lot of your job,
There's no two ways about that. But planning is a
good thing, and when it comes to college, it's certainly
a good thing. We know this time of year, a
lot of people are getting ready to send maybe their
freshmen off this fall, and they're getting all their finances together.
We hope that you started to do your planning just
a bit before now. But it's just always important if
(01:38):
you're planning to send kids off to college, whether it's
you or your grandkids or who it may be, to
start to think about that early and to make a plan,
especially in these times when college has gotten so expensive.
So we'll talk a little bit about college planning, and
then we'll talk about rules and strategy for five twenty nine,
(02:00):
but universal life insurance for college and other expenses. There
are other means by which you can put together dollars
for education. And then finally we'll talk about wealth stability
and family finances. And you know, Larry, planning for college
can certainly affect a full families finances.
Speaker 4 (02:19):
Oh, I definitely can.
Speaker 2 (02:20):
We just had two our identical twins graduate from two
different colleges. We have one in med school in North
Carolina and then one at the University of Kansas. So
we know a little bit about college and money and
the financial aspect of it. And I sure hope we're
planning as much as you can advance because it gets
here fast. And you're right, college costs are astronomical. I
(02:43):
just know that I did my four year at Bethel
College and what it was when I went compared to
what it is now, let's just say those numbers are
considerably different.
Speaker 3 (02:53):
Yes, yes they are. So when do you think, gentlemen,
is the best time to start thinking about out your
children's college educations?
Speaker 5 (03:03):
Well, nowadays it seems to be as soon as they're born.
It should be a thinking and consideration of how do
we best prepare our child for college or grandchild? You know, however,
the situation is because, yeah, if you save up for
eighteen years and you invest those savings, it can have
(03:27):
a huge impact on the costs for the tuition and
room and board and all of that. In a lot
of cases, it still might not cover the full thing.
So you know, the prices of college have gone up
quite a bit. I have a two year old and
an eight month old. We already started saving for their
college as soon as each of them were born, and
(03:50):
we just know that tuition is probably going to keep
going up. It's just hopefully it doesn't go up as
much as it has in recent history.
Speaker 6 (03:57):
Here.
Speaker 3 (03:58):
Absolutely, I know that we're going to talk about five
twenty nine in our next segment, but talk a little
bit about when when you have people who come in
and they say, we're thinking about college costs and we
feel very overwhelmed and we're not exactly sure how to
even get started or what to do with this money,
where do you guys guide them?
Speaker 5 (04:17):
Well, five two nine is one area that you can
uh direct money into and that can help for college
without going into it too much because we have it
for next segment. I like that concept if it's for
longer duration, so if it's a younger child, you know
they were just born or let's say under the age
(04:39):
of like seven or eight, I think that's a good
tool because you want you want time for those assets
to build. If it's beyond that, you know, there's custodial
accounts that you can go into and all that, but
it's it's it's a good thing to save what you can.
I mean, you have to take care of yourself first,
(05:00):
and you know your situation. But if there's extra stuff
that you can save to help, you know, minimize the
impact of college tuition, it's super important because that student
debt can really eat away and put you in bad
situation once you leave college. I was looking at pre
(05:21):
COVID data. Seven percent of people repaying their student debt
defaulted within three years. That's a huge percentage and that's
a huge problem that we have in this country with
student debt, and looking at at the student debt currently,
it was about one point seventy four trillion dollars across
(05:42):
forty five million borrowers. So that's a huge impact and
something that we need to try and minimize absolutely.
Speaker 3 (05:52):
So one of the things I know that you must
advise your clients is that they cannot eat at their
own personal retirement to get their kids to college or
to pay the kids student debt. That's got to be
something you say on a regular basis.
Speaker 4 (06:09):
It is because unfortunately, Kim, we've seen.
Speaker 2 (06:13):
Kids that are enabled and the parents take more care
of the kids than they take care of themselves planning
for retirement, which can be very problematic, So be careful.
I mean, granted, if you can put money away, great,
even a little bit over eighteen years or twenty years
can go a long ways.
Speaker 4 (06:31):
But you also got a way.
Speaker 2 (06:33):
You know, not everybody's going to go to college. We're
big into education, don't get me wrong. But you know,
I know trade schools have great opportunities, and I see
some great success with kids that have gone through trade schools,
and you know, they can actually get a job and
they don't build up all this student debt that some
kids dig such a big hole they can't even get
(06:53):
out of the hole.
Speaker 4 (06:55):
So again, let's face it, the purchasing.
Speaker 2 (06:57):
Power of the dollar today for today's kids isn't what
it was in the olden days, if you will. So, yeah,
we're having these conversations, and you know, my wife and
I we had a difference of opinion. Imagine that in
a marriage, Kim. That's pretty amazing, isn't it.
Speaker 3 (07:12):
I've never heard of that.
Speaker 2 (07:13):
Larry Well, Yeah, well, you know, when I went to college,
my parents made us have skin in the game. And
I don't think that's bad to have skin in the game.
Because then they feel like, you know, they're attached to
it and there's a cost to it and they're paying
for some of it. Granted, if you can bless your
kids or grandkids, we do have. I see this more
(07:33):
often than not, especially with folks that we sit down
with where their grandparents and they're more concerned about their
grandkids than necessarily their kids, and that can be an
effective way of putting money for the grandkids. And we'll
talk about different ways you can do that. But there's
a variety of different ways you can accomplish this, but
(07:54):
it's having the conversations once again, discussing what those options are,
make making sure your life is an adversely affected or
your budget, taking care of you first, and then working
it into the budget to see if it's even a
possibility to be doing it.
Speaker 3 (08:09):
Sure. Yeah, I think that it's really important for people
to understand that saving money for college is great, but
there has to be some strategy behind it, because the
dollars have just gotten so out of control, they're just
so crazy at this point.
Speaker 2 (08:25):
Most definitely, again, the value is still there in an
education and the higher salaries and the higher potential. But again,
some people again come out with so much debt and
then they can't even get a job, or maybe unfortunately
they switched, they switched degrees halfway through and now they
even got more student debt. Again, we're very cognitive of
(08:49):
debt and what that can do, even for young people,
especially for retirees, and you just have to tread that
water very very lightly to make sure that you're doing
what's appropriate and reasonable given your circumstances and you're not
overstepping your boundaries.
Speaker 4 (09:05):
That can cause a lot of problems.
Speaker 3 (09:07):
Yeah, I sure can. So if you're looking for some
advice on how to begin the process of saving for
your college, for your child's college education, or maybe saving
for a grandchild's college education, give the folks at Haven
Financial Group a call. They can talk you through some
of these other strategies that we're going to talk about
(09:28):
during the course of this show, but they can also
just hear out what your plans are and how that
can maybe plan into your your portfolio. How much of
your portfolio maybe you can give up to a student.
The number is six one two five zero four eight
four zero zero. Let me give you that again. It's
(09:49):
six one two five zero four eight four zero zero.
Call the folks at Haven Financial Group. Tell them you
heard us here on the radio talking about saving for
college education and that you are looking for a partner
to help with your strategies when it comes to saving
Havenfinancialgroup dot com. You can also check them out there.
When we come back, we are going to talk about
the rules and the strategies behind for twenty nine's You
(10:12):
heard Kyle say, just a moment ago, he believes you know,
if you are just starting a family and you're thinking
about starting to save money for college, this is a
great way to do it when you have time on
your side. And we'll talk more about that on the
other side of this break. This is the Haven Financial
Group Radio Show.
Speaker 1 (10:31):
Don't go too far. We're gathering more important insights and
retirement ways. Devin, The Haven Financial Group Radio Show will
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kolvig and Kim Karagan. Now back to
the show.
Speaker 2 (10:52):
Good morning, and thanks for listening to the Haven Financial
Group Radio Show. I'm Larry Kalvig, founder and CEO of
the Haven Financial Group. Feel free to give us a
call at any time six one, two, five zero four
eighty four hundred. We love to visit with you and
see where you're at in the planning process for retirement.
Or visit us online at Havenfinancialgroup dot com. There's all
(11:14):
kinds of retirement tools. There's a calendar of educational events
as we do throughout the whole course of the year.
Medicare made simple, investment classes, social security and tax trust
wills and legacy planning, a variety of all the different
retirement subjects that affect you in retirement. And we're firm
(11:34):
believers in the education process. Is Kim and you and
I talk about every single week?
Speaker 3 (11:39):
Yeah? Absolutely. This week we're talking about saving for college educations.
And there might be some people out there who are thinking, hm,
why would we talk about that when we partypically talk
about retirement. But these are two these are two coinciding situations.
You know, you certainly when you're young and maybe you
want to start to save for your kids for their
(12:00):
college education, but you cannot let that eat into your
retirement savings for yourself. So what are the best strategies
to keep them parallel but not crossing lines? And Kyle
Thomas is with US certified financial planner. And Kyle, you
said you have two little ones and you love this
idea of a five five twenty nine. Explain to everybody
what that is.
Speaker 5 (12:20):
Yeah, So a five two nine is a plan for
education savings that you can put into this account. You
can invest it, grow it just like any other type
of account, and you can get a tax deduction for
it depending on what state you're in.
Speaker 6 (12:37):
For Minnesota, if you're married.
Speaker 5 (12:38):
Finally, jointly, you can get a three thousand dollars tax
deduction for contributing.
Speaker 6 (12:43):
To one.
Speaker 5 (12:46):
And then you can also you get that tax deduction.
But then when you take it out to fund tuition
or room and board books, all of that stuff, all
that stuff that applies towards that education expense, it's completely
tax free to take it out. So it is a
great benefit if you can attribute some assets to it.
(13:10):
But there's a lot of other caveats that go into
it too that create some flexibility for you, and you
know some other pieces of information that you can actually
create a little more benefit as well, and we can
get into that.
Speaker 3 (13:25):
Sure. Well, the first thing is early is better. Right,
You have said you have just little ones, and you've
already started.
Speaker 5 (13:32):
Yeah, earlier the better because those compounding returns really add up.
And you know, we've talked about on previous different segments,
the longer you have for time, the more you can
make because those later years in your time horizon is
actually when you make the most money. Because let's say,
(13:53):
you know, five percent on ten thousand dollars is a
lot less than five percent on one hundred thousand dollars, right,
so hopefully we could get to a larger number by
the end of that you know time horizon where they
turn about eighteen years old, and then you're making good
return on that money. And it's that's why it's important
(14:13):
to start very early on.
Speaker 3 (14:16):
So what do these plans actually cover?
Speaker 5 (14:19):
So they cover tuition, that's the big one, and then
room and board, they cover books, they can cover laptops,
internet access. You can get pretty creative with all of this,
and it's very flexible. And it's not just college too.
I mean, you can have this cover tuition for any
(14:40):
kind of further education. If you wanted to go to
a cooking school, if you want to go to trade school.
You know all that, all of those things count towards
five to nine funding.
Speaker 3 (14:52):
So can it yeah, I'm sorry, can it? Can it
pay for tuition? Let's say if you decide that you're
going to send your kids to private high school.
Speaker 5 (15:00):
Yes, it can pay for private high school. There is
caps on that. That's ten thousand dollars per year can
be used for that. Also, of note, you know I
was talking about that deduction. That deduction gets recaptured if
you use it in those years, so it only it
doesn't get recaptured if it's.
Speaker 6 (15:18):
Post high school.
Speaker 5 (15:20):
So but yes, you can use it for private school
kindergarten through twelfth grade. But again, you know, now you're
not allowing for as much compounding interest and gains inside
of there because now you're using it at a lower,
lower education level, So there's not as much time horizon
built in.
Speaker 3 (15:39):
Okay, So let's say that you set up a for
this five twenty nine for your oldest child, and then
your oldest child says, I don't want to go to college.
Can you change it to a different.
Speaker 6 (15:54):
Child, Yeah, you can.
Speaker 5 (15:56):
You can change beneficiaries, so there's flexibility within that. So
child A decides not to go to college, you can
change the beneficiary to child B. Or there was some
legislation passed a few years back that if the five
two nine is owned for fifteen years, you can convert
(16:17):
up to thirty five thousand dollars over that child's lifetime
to roth ira. So but you are subject to that
annual limit. Right now, the annual limit is seven thousand,
So you could convert seven thousand dollars for five years
to a roth Ira for that child who decided not
to go to college. Which that's a huge impact as well,
(16:38):
because now they're converting that savings to completely tax free
growth and they wouldn't be taking it out until age
fifty nine and a half. So think about the compounding
returns incorporating that kind of time horizon as well.
Speaker 6 (16:54):
So that and you.
Speaker 5 (16:56):
Can also change the beneficiary to yourself too, so limited
and who it has to be. It's not just children
that you the you can change it to.
Speaker 3 (17:05):
So Okay, Now, if you start your savings in the
state of Minnesota and then you move to Florida, do
the rules change.
Speaker 5 (17:18):
No, the rules do not change. It's just contributions that
can change. So depending on what state you're in, they
can change and the tax deductions associated with them, because
that deduction is only on the state side, it's not
a federal deduction, so keep in mind everything associated with that.
Then one other thing I want to point out here
(17:39):
too is five two ninees owned by the parent are
included on the FAFSA, So when you go to file
the FAFSA that those assets that your child is a
beneficiary on it's included. One way to get around that
is to have the grandparents be a five two nine owner.
So if you know my children, if one of my
(18:02):
parents or one of my wife's parents owned the five
two nine, that's not going to be included on the FAFSA.
And by the time that they turn eighteen, those assets
could be significant. If you're contributing every year and there's growth,
that could be a huge impact that this college does
not associate with your child.
Speaker 3 (18:21):
Okay, but now what have happened? Forbid it's in someone
else's name, someone else owns it, and then they pass away.
Speaker 5 (18:30):
There are successor trustees for every one of these accounts,
so typically you know that would be if my dad
had a five two nine for my child, I would
most likely be the successor trustee, So then if anything
happened to him, I would become the owner of the
account with whatever child was associated to that account still
(18:52):
being the beneficiary.
Speaker 3 (18:53):
Is that something you recommend?
Speaker 5 (18:55):
Yeah, absolutely, you should one hundred percent set up a
success or trustee just so things don't get murky. And
I think a lot of the companies make you do that,
which is awesome. They make the beneficiary system set up
in case that happens because they probably see it quite
a bit, and it's important that someone else can watch
(19:17):
over the assets.
Speaker 2 (19:19):
So, Kim, you mention, Kim, if I may interrupt, you
mentioned if somebody moved from Minnesota to Florida, why would
anybody move from Minnesota to Florida any particular reasons like taxes, weather,
in a variety of other things.
Speaker 4 (19:33):
Okay, I guess maybe I get.
Speaker 3 (19:36):
I didn't want to be the one to say, but.
Speaker 2 (19:40):
Believe me, we have many clients that are snowbirds to Florida,
so I completely get it. But I think it takeaway here, Kim.
You know it's smart planning. If five twenty nine can
be more than just a college fund, it can be
a powerful, flexible financial tool, and we want folks to
look at all the various tools. So having somebody that
(20:00):
what they're talking about a good partner that is working
on your behalf, looking at all these different strategies and
your family's financial.
Speaker 4 (20:08):
Goals and other goals.
Speaker 2 (20:10):
You know, give us a call, let's get started, let's
have a conversation, and that's really where it starts, and
there is no.
Speaker 4 (20:16):
Cost to do it.
Speaker 2 (20:18):
Feel free six one two five four eighty four hundred
Habnfinancialgroup dot com. We have a very proprietary process. You
get to know us, we get to know you. We
talk through things. We're not in any rush, and we
come up with some strategies, recommendations, suggestions.
Speaker 4 (20:35):
If you think we're a good fit.
Speaker 2 (20:37):
Obviously we're looking to build long term relationship and partnerships
and we work on your behalf, so we'd love to
visit more.
Speaker 3 (20:45):
I really feel like too. Setting up one of these
five twenty nine's is the perfect way for maybe a
young couple to come in and get to know your team, Larry,
maybe they weren't quite ready to start, you know, a
portfolio for a retire but this is a great place
to start with your team and then to continue a relationship.
Speaker 4 (21:06):
Great place to start.
Speaker 2 (21:07):
And if you're a grandparent and you're concerned about your grandkids,
another great place to start. So there's a lot of
good places to start, but the key is get started absolutely.
Speaker 3 (21:16):
Six one two five zero four eighty four hundred. Tell
them that you're ready to start today. When we come back,
we're going to talk about universal life insurance for college
and other expenses. You may never have thought about this
strategy yet another one. Larry and Kyle we're going to
help us talk through exactly how this can be done.
(21:37):
You're listening to the Haven Financial Radio Show.
Speaker 1 (21:41):
Ready to find your financial safe haven. Your dream retirement
is in reach. Don't go away. The Haven Financial Group
Radio Show will be right back. Are you worried that
your financial strategy might be missing something, Well, you're in
the right place. Larry Kolvig is back and ready to
help you find your financial safe haven.
Speaker 2 (22:03):
Welcome back listeners. My name is Larry Kolvig, founder and
CEO of the Haven Financial Group. And if you're just
tuning in, you're listening to the Haven Financial Group Radio
Show on every week from nine to ten. Glad you're listening,
feel free to give us a call six one two
five zero four eighty four hundred or Havenfinancialgroup dot com.
Every week we discuss crucial retirement and financial topics, so
(22:25):
a whole bunch of them that can really make the
difference between surviving retirement and thriving through it. And they
are called the golden years for a reason. We want
to make sure they're as golden as possible.
Speaker 3 (22:37):
I love that Kyle Thomas is with us. He's a
certified financial planner. We've been talking about saving for college
and we're really addressing two different groups. We're addressing you know, parents,
but maybe grandparents too who would like to get involved
in this process. And it's not just a savings plan,
it's a strategy. We talked just a minute ago about
five twenty nine's and now we want to talk about
(22:59):
a universal life insurance strategy. This is something I really
was not very familiar with until we started to go
through this. So I don't know which one of the
two of you would like to talk about it, but
explain how universal life insurance can be a savings tool
for a college education.
Speaker 5 (23:17):
Yeah, this is another tool and it has some similar
characteristics to a five two nine and so a universal
life insurance policy. It gives you flexibility with the premium,
so you can put in, you know, a X amount
and next year. If you wanted to do more or
(23:38):
not as much, you can. You can do whatever you want.
Traditional insurance policies or some traditional insurance policies have a
fixed amount that you have to do otherwise this will lapse.
But this is a universal life insurance policy, so that's
the universal part provides that flexibility. And now when you
(23:59):
make these contrabutions, there's a cash value that accumulates and
the account. Also the policy can be indexed to the
S and P five hundred for example, and there can
be growth associated with that policy, which is what you
would end up drawing on for the education.
Speaker 6 (24:19):
Expenses as well.
Speaker 5 (24:20):
So kind of similar to the five two nine, you know,
where where it's indexed with some kind of stock market return.
It's just a different product avenue to go down.
Speaker 3 (24:33):
What happens if there's big losses in the SMP, for example.
Speaker 5 (24:37):
Well, so with this one, if if there's losses in
the SMP, there is a zero percent floor. So if
you're in the five two nine, you actually lose money
with that one. But with this type of policy, uh,
there is no losses use. So that's the benefit of
having this floor inside of it. And in that way
(24:58):
you don't have losses, which losses are actually worse than
having big gains because losses you rode away and have
a bigger impact than gains. Do you know if you're
looking at the same kind of degree of loss versus gain.
Speaker 3 (25:14):
What are the tax ramifications in a universal life insurance policy?
Speaker 5 (25:19):
So this one is also going to be tax free
as long as it's going to be used for the
college expenses, So loans or withdrawals from the policy or
tax free, giving you the flexibility to not have to,
you know, pay taxes on any of the distributions that
(25:40):
you're using for the college expenses. And then this also,
because it's not technically an asset, it doesn't have an
impact on the FAFTS as well. So back to the
five two nine. You know the grandparent is the owner
or someone who's the non parent if they own the
five two nine, there's no impact. Well, the parent can
(26:01):
own this policy and there's no FAFSA impact because it's
not technically an asset. You're borrowing against a policy and
it doesn't show up on your net worth per se five.
Speaker 3 (26:12):
Twenty nine are used for education. This doesn't necessarily have
to be used for education. You could use this as
a savings tool, correct.
Speaker 5 (26:18):
Yeah, you can use this as a savings tool. You
could use it for retirement if you held onto it
until then. And the way that this works is the
longer that you wait on taking withdrawals from it, the greater.
Speaker 6 (26:33):
The benefit that you receive is.
Speaker 5 (26:36):
So there's a bunch of different universal life insurance policies
and different one structure for different things. But you have
a death benefit protection as well, so that makes sure
that you have a guaranteed amount that the beneficiary of
the account will receive if something ever happens to you.
So you have a death benefit protection with the policy.
(26:57):
So if something happens to the owner of the policy,
see there is still a protected amount that the beneficiary
would receive. You can supplement retirement with it. You know,
if you don't use it all for college, you could
use it for retirement and let it, let it grow.
And it's protected from creditors as well, so you know
in a lot of states, cash value and life insurance
(27:19):
can be protected from those creditors. So if anything happens
and you have debts and liabilities, that that part will
not be taken away.
Speaker 3 (27:28):
So tell me what would happen though, Kyle, if this
insurance company goes out of business.
Speaker 5 (27:33):
So the if the insurance company goes out of business,
that you know that that has happened before. But we
typically only work with insurance companies who are A rated
or better, and those A rated or better companies.
Speaker 6 (27:49):
Typically don't run out of business, and.
Speaker 5 (27:51):
If they do, other insurance companies will step in and
assume whatever debts that that company has. It happens quite
a bit. I mean with banks as well. The government
just doesn't really let that happen, and there's always some
kind of bailout that happens, so people don't end up,
(28:14):
you know, losing their assets that are invested in these companies.
Speaker 2 (28:17):
I'm going to add to that, correct, we typically only
work with A rated companies. There's B and C companies
and for good reason. You know why we only work
with a rate of companies. They're strong, they've been around
a long time. But a lot of these are also
backed up to a certain amount by the state guarantee
fund where they're being offered, so there is protection there.
And I know this segment is talking about universal life
(28:39):
for college planning. I'm going to take it a little
step further here though, If that's something you're interested, certainly
come on in. We can we talk about universal life
if you're if you're younger, and just get the conversation started,
it might be a great place.
Speaker 4 (28:54):
But if you're a.
Speaker 2 (28:55):
Listener and you have life insurance, when's the last time
you had a life insurance review? You say, well, I
haven't in years. How do you know that your policy
is doing what it's supposed to be doing. How do
you know it's not eating itself up? Do you know
if you have a variable life insurance policy, do you
have whole life? What's the cost associated with it? You
(29:15):
really owe it to yourself to get a life insurance review.
We have access to pretty much all the companies here
at Haven. Glennon Isabelle in our office do life insurance reviews.
Speaker 4 (29:26):
We expose a lot of.
Speaker 2 (29:28):
Things that you want to know now rather than waiting
till later and find out, oh my goodness, I just
paid into all this and now it's not going to
do what it was supposed to do. So life insurance
review there's.
Speaker 4 (29:38):
No cost to it.
Speaker 2 (29:39):
It might be eye opening and if it's nothing more
than confirmation that you're in a good spot, great, are
we going to try to sell you a bunch of
life insurance. No, not if you don't need something. I
mean salespeople sell you something sometimes you don't need. But
can it work into your retirement plan? It certinly could.
If you're a high net worth listener. Have you ever
(30:01):
looked at life insurance retirement plans? They're called lurps. Might
be another way too, if legacy is important to you
to pass on to your loved ones, your heirs or grandkids,
so lurps life insurance retirement plans. They've become more popular
since the rules with iras and r and ds, since
the rules changed here about five years ago. So life
(30:22):
insurance has is a broad spectrum of products for a
variety of reasons. Get it reviewed, get it looked at,
and that can piggyback into a long term care conversation,
which nobody wants to have. There's some good options out
there that haven't been around for that long. Let's look
at all the options, find out what's good, bad, and indifferent,
and then at least you'll know and there is no
(30:44):
cost for that.
Speaker 3 (30:45):
Absolutely well, most people don't think about life insurance in
this way. I think a lot of people have some
sort of an old idea about life insurance. You buy it.
You bought it so that it covered your expenses when
you died and maybe left a little something for your spouse.
But life insurance can be you in a lot of
different ways now. And if you're someone who would like
to look into this universal life insurance for college savings
(31:07):
or maybe for retirement savings, be sure you give the
folks here at Haven Financial Group a call six one
two five zero four eight four zero zero. That's six
one two five zero four eight four zero zero. We're
just trying to give you all an idea of the
many options that are out there to help you, maybe
say for your college bound kids, maybe your grandkids, and
(31:30):
of course all of this time to ultimately your retirement.
When we come back well stability and family finances, we'll
talk about that right here on the Haven Financial Group
Radio Show.
Speaker 1 (31:40):
Don't go too far. We're gathering more important insights and
retirement ways Devin the Haven Financial Group Radio Show. We'll
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kolvig and Kim Karragan back to the show.
Speaker 2 (32:02):
Good morning, and welcome back to the Haven Financial Group
Radio Show.
Speaker 4 (32:06):
Thanks for listening today.
Speaker 2 (32:07):
Feel free to give us a call at six one
two five zero four eight four zero zero or Havenfinancial
Havenfinancialgroup dot com. All kinds of tools on the site,
a lot of interaction, a lot of good recipes, even shared.
They're all kinds of good stuff, maybe not just the
stuffy retirement stuff, all kinds of fun stuff. Because as
(32:27):
much as this is serious conversations that we have on
a weekly basis at Haven Financial Group, we like to
have as much fun as possible. We're coffee snobs here, Kim.
You know that we like we have fresh cookies with
every meeting. Maybe that in itself is just appealing. Forget
the conversation. Maybe that's maybe that's good, but we like
to have fun with really important topics. We take it seriously,
(32:50):
but you got to have a spoonful of sugar helps
the medicine go down a little bit.
Speaker 3 (32:53):
Yeah, so so true. You're so right. Six one two
five zero four eighty four hundred. That's how you get
hold of my friends there at Haven Financial Group. We
wanted to talk a little bit about wealth stability and Ultimately,
you know that comes back to your family finances. In
the segment before, we were talking about universal health insurance
(33:14):
life insurance rather and how that can be a tool
for saving and you were mentioning, Larry, you know that
if you're a high net worth individual, that might be
a really great way for legacy planning. Talk to us
a little bit more about that.
Speaker 2 (33:29):
Well, too often bad decisions are made. Maybe the wealth
is created, but it's lost really quickly. I think the
statistics show that seventy percent of wealthy families lose their
wealth by the second generation and ninety percent by the third.
Bad decisions, lack of education, lack of preparedness that can
be even piggyback into not having an estate plan, which
(33:50):
of course provision law. Harry N and Keith are state
planning partners. Do you have a will or trust or
powers of attorney? Do you have an exit strategy? If
you haven't, please take the time. It's well worth it.
Otherwise it's going to cost you your estate and your
kid's time, effort and money. So again, having a long
term vision and creating the financial literacy amongst the family,
(34:16):
having the community, good communication and the discussions in advance, proactive,
not reactive. I understand some families you don't have that communication,
maybe you don't have the relationship, but to the best
of your ability, to get prepared can go a long
way avoiding crisis. Now when you're here in crisis, when
(34:36):
you're gone, I can't. I can't make it any more
important because we see. I bet you I've had a
half dozen or twenty this year where they lost loved
ones and everything's a mess. They never got around to
doing anything, and by that time, oftentimes it's too late.
And that's not meant to put a fear factor in
(34:58):
anybody listening.
Speaker 4 (34:59):
It's reaction.
Speaker 2 (35:00):
You know, the mortality rate in the United States is
one hundred percent. We're all going someday.
Speaker 4 (35:06):
I heard there was. I heard there's a few that
actually did.
Speaker 2 (35:09):
But that's a talk for Sunday morning, which today is
Sunday morning, so I guess we can go into that.
Speaker 4 (35:13):
As well, not for today.
Speaker 2 (35:15):
So again, proactive not reactive. Having a plan a failure
to plan as a plan to fail. None of us
want to, but so many families do because they're just
not prepared.
Speaker 3 (35:27):
You know, I think so many people who are listening
to this may be thinking, well, this doesn't really apply
to me because they don't have a lot of dollars.
But planning for you know, your your family's future, and
planning for what may be left behind.
Speaker 4 (35:42):
Everybody has that almost definitely, I don't.
Speaker 2 (35:46):
We're speaking to those that have very little and those
that have a lot, and every single listener in between. Somehow,
some way this is going to affect you. And again
a lot of times the state planning, oh, that's only
for the rich people. That could not be further from
the truth. Do you want to avoid probate? It only
takes seventy five thousand of probatable assets in the state
(36:07):
of Minnesota to get a formal probate, which most would.
Speaker 4 (36:11):
Want to avoid. The question is how do you avoid it?
Speaker 2 (36:15):
Beneficial interests, life insurance, how do you protect assets? Maybe
spend down process for the nursing home. These are all
not fun, comfortable conversations, but important conversations to protect whatever
you have put together, small, medium or large. Whether you
have no kids or eight kids, or commingle or commingled
(36:38):
assets with a second marriage, there's all kinds of different
dynamics or lack of dynamics. What do you do to
prepare for the unknown when it happens.
Speaker 4 (36:48):
That's what it's about.
Speaker 3 (36:49):
And you know, I think one of the things that
people aren't thinking about frequently is the tax ramifications. That's
something that you really need to sit down and talk
with an expert about.
Speaker 2 (37:00):
Well, you know, Lances are in house CPA and we
do lots of tax planning and we have lots of
tax discussions as it relates to retirement, income streams, etc.
But yes, if you pass away, different states have different
rules when it comes to an inheritance tax or an
a state tax at the federal level, at the state level,
(37:22):
what do you do to avoid or minimize that is
a revocable trust the right thing to do irrevocable trusts.
Getting educated about these things so you don't get something
you don't need, but you better make sure that you
have what you need when it comes to that. So, yes,
taxes are relevant, and a lot of times people pay
(37:42):
on taxes unnecessarily just because there was a lack of
preparation or maybe a lack of a financial tool that
could have been used. So we like to explore all
the options and that really comes with ongoing conversations.
Speaker 4 (37:56):
We see folks getting inheritance.
Speaker 2 (37:58):
Just this last week, I probably had two different couples
that came in who just are in the process of
receiving an inheritance. How do you bring that into your
asset mix? Okay, how do you want it invested? Is
there going to be a tax ramifications that you definitely
want to be prepared for avoiding those negative surprises.
Speaker 4 (38:19):
That's what we're trying to avoid.
Speaker 3 (38:20):
Sure. Another thing about this, Larry, that seems pretty important
when it comes to protecting generational wealth is the idea
that you need to establish a family governance. And I
think you know you sort of mentioned this before, but
you would rather establish that while you're here than leave
(38:41):
it to those who are left behind to make those decisions.
Speaker 2 (38:46):
Yeah, let's face it, if you have more than one
child or don't have any, there's going to be different dynamics,
different ones you want in control of things if something happens.
It's why a durable power of attorney for financial maybe
different than a durable power of attorney for healthcare or
you're living will, Who's in charge? You know all those
type of things. Who do you want to be in charge?
And a lot of times people said, well, I don't
(39:07):
have anything in place legally, and because I don't know, well,
what about a friend, a neighbor, a parent, a pastor
your kids whoever. Keep in mind, if you have an
appointed lawful attorney. In fact, in essence, what you've done
is you put the state where you live in control
of your affairs. If you can't speak for yourself, if
(39:28):
there's an accident or whatever, that might happen. So if
you're eighteen, everybody should have those powers of attorney. Otherwise,
what happens is the state takes over your finances in
the form of conservatorship or in the form of a guardianship.
Speaker 4 (39:45):
Now they're your parent as well.
Speaker 2 (39:47):
So I don't think any of us want that to
be that to happen, but it happens all the time.
Avoid the mistakes that potentially could happen. You say, nothing's
ever going to happen. Nothing's ever going to happen until
what Until something happens, it happens, and by that time
it may be too late.
Speaker 3 (40:04):
And then there are those who would that generational wealth.
Maybe they feel it's more important for it to be
passed on in a charitable way versus maybe through their errors.
Speaker 2 (40:16):
And we love to see and we do see a
lot of our clients that are very charitable and in
our conversations and initially we ask do you have it?
Speaker 4 (40:24):
Are you charitable?
Speaker 2 (40:25):
Now you don't give charitably for tax reasons, but I
am always We're always anxious to hear about passions that
people have with different charities.
Speaker 4 (40:33):
We're at Haven, we're financial group.
Speaker 2 (40:35):
We're passionate about Cando canines, you know in our office,
our local churches, and a variety of different things which
I love to hear about. And for many of our
clients that is important. So how do you get it
to your favorite charity in the most tax efficient way
possible even when you're living. We do qualified charitable distributions
(40:55):
for clients required minimum distributions. And then when you're gone,
who do you want it to go to? A revocable
trust is oftentimes the best way to do that. So
all we're looking at is what fits your long short term,
your midterm, your long long term goals, and how do
we get to the finish line and how do we
get to happen what we want to happen and leave
(41:18):
your family in the best situation possible. That's ultimately the goal.
We're not trying to make it complicated. We're trying to
simplify things before things get to that point.
Speaker 3 (41:29):
And this is one of those things in your life, folks,
that you need a partner. It's been a reoccurring theme
throughout this entire show. But if you're looking for a
partner to help you make sure that your family wealth
is stable. And when I say family wealth, it just
means you know, your family finance is what you've worked
so hard all of your life to make sure that
(41:52):
it's stable and that it has passed on to your
loved ones or to wherever you'd like for it to
go in the manner in which you had hoped. If
you're looking for someone to help you do just that,
it's six one two five zero four eight four zero zero. Again,
that's six one two five zero four eight four zero zero.
That is the number to reach the folks at Haven
(42:13):
Financial Group. Tell them you heard us here in the
radio and you'd like to sit down and have a
first discussion about whether it is you know, passing on
generational wealth, if it's saving for college, or it's putting
together a great portfolio that's going to give you the
golden years that you're looking for again one more time
six one two five zero four eight four zero zero.
(42:36):
We've had a lot of information in a short period
of time, Larry.
Speaker 2 (42:39):
A lot of information. Kyle, thanks for being with us
and Kim, we'll see you next week. Thanks for listening.
Speaker 6 (42:44):
Thank you.
Speaker 3 (42:46):
Investment advisory service is offered through Guardian Well Strategies LLC.
Speaker 5 (42:50):
Haven Financial Group and Guardian Well Strategies LLC are not
affiliated companies, and investments involve risk, and, unless otherwise stated,
are not guaranteed.
Speaker 3 (42:58):
Please consult with the qualified fiveinancial advisor and or tax
professional before implementing any strategy discussed herein and comments regarding
it safe and secure.
Speaker 1 (43:06):
Investments and guaranteed income streams only refer to fixed insurance products.
They do not refer in any way to securities or
investment advisory products. Fixed insurance and annuity product guarantees are
subject to the claims paying ability of the issuing company.
You worked hard for your money, but do you know
how to make it work hard for you. You need
a team with experience, vigilance, and a strategy to help
you live the retirement you deserve. Find your financial safe
haven with Haven Financial Group. Today, you're listening to the
new and improved Haven Financial Group Radio Show, where we
bring you comprehensive weekly financial wisdom from the professionals. It's
(00:23):
all about helping you solve retirement problems so you can
make your nest egg last. Your tune to the Haven
Financial Group Radio Show with your host, Larry Kolvig and
Kim Karrigan your guides to weekly retirement confidence. If you're
interested in protecting and growing what you have, let us
be your financial safe haven. The phone nines are always
(00:43):
open at six point two five four eighty four hundred.
Now get your financial questions ready because the Haven Financial
Group Radio Show starts now.
Speaker 2 (00:54):
Good morning, and welcome to the Haven Financial Group Radio Show.
I'm Larry Kulvig, founder and CEO of the Haven Financial Group,
on with Kyle Thomas, certified Financial Planner, and the investment
team as well Kim. We're going to talk about college
planning and family planning and all kinds of planning. And
it seems like we talk of planning every week, don't we.
Speaker 3 (01:14):
We do, we do, and that's a lot of your job,
There's no two ways about that. But planning is a
good thing, and when it comes to college, it's certainly
a good thing. We know this time of year, a
lot of people are getting ready to send maybe their
freshmen off this fall, and they're getting all their finances together.
We hope that you started to do your planning just
a bit before now. But it's just always important if
(01:38):
you're planning to send kids off to college, whether it's
you or your grandkids or who it may be, to
start to think about that early and to make a plan,
especially in these times when college has gotten so expensive.
So we'll talk a little bit about college planning, and
then we'll talk about rules and strategy for five twenty nine,
(02:00):
but universal life insurance for college and other expenses. There
are other means by which you can put together dollars
for education. And then finally we'll talk about wealth stability
and family finances. And you know, Larry, planning for college
can certainly affect a full families finances.
Speaker 4 (02:19):
Oh, I definitely can.
Speaker 2 (02:20):
We just had two our identical twins graduate from two
different colleges. We have one in med school in North
Carolina and then one at the University of Kansas. So
we know a little bit about college and money and
the financial aspect of it. And I sure hope we're
planning as much as you can advance because it gets
here fast. And you're right, college costs are astronomical. I
(02:43):
just know that I did my four year at Bethel
College and what it was when I went compared to
what it is now, let's just say those numbers are
considerably different.
Speaker 3 (02:53):
Yes, yes they are. So when do you think, gentlemen,
is the best time to start thinking about out your
children's college educations?
Speaker 5 (03:03):
Well, nowadays it seems to be as soon as they're born.
It should be a thinking and consideration of how do
we best prepare our child for college or grandchild? You know, however,
the situation is because, yeah, if you save up for
eighteen years and you invest those savings, it can have
(03:27):
a huge impact on the costs for the tuition and
room and board and all of that. In a lot
of cases, it still might not cover the full thing.
So you know, the prices of college have gone up
quite a bit. I have a two year old and
an eight month old. We already started saving for their
college as soon as each of them were born, and
(03:50):
we just know that tuition is probably going to keep
going up. It's just hopefully it doesn't go up as
much as it has in recent history.
Speaker 6 (03:57):
Here.
Speaker 3 (03:58):
Absolutely, I know that we're going to talk about five
twenty nine in our next segment, but talk a little
bit about when when you have people who come in
and they say, we're thinking about college costs and we
feel very overwhelmed and we're not exactly sure how to
even get started or what to do with this money,
where do you guys guide them?
Speaker 5 (04:17):
Well, five two nine is one area that you can
uh direct money into and that can help for college
without going into it too much because we have it
for next segment. I like that concept if it's for
longer duration, so if it's a younger child, you know
they were just born or let's say under the age
(04:39):
of like seven or eight, I think that's a good
tool because you want you want time for those assets
to build. If it's beyond that, you know, there's custodial
accounts that you can go into and all that, but
it's it's it's a good thing to save what you can.
I mean, you have to take care of yourself first,
(05:00):
and you know your situation. But if there's extra stuff
that you can save to help, you know, minimize the
impact of college tuition, it's super important because that student
debt can really eat away and put you in bad
situation once you leave college. I was looking at pre
(05:21):
COVID data. Seven percent of people repaying their student debt
defaulted within three years. That's a huge percentage and that's
a huge problem that we have in this country with
student debt, and looking at at the student debt currently,
it was about one point seventy four trillion dollars across
(05:42):
forty five million borrowers. So that's a huge impact and
something that we need to try and minimize absolutely.
Speaker 3 (05:52):
So one of the things I know that you must
advise your clients is that they cannot eat at their
own personal retirement to get their kids to college or
to pay the kids student debt. That's got to be
something you say on a regular basis.
Speaker 4 (06:09):
It is because unfortunately, Kim, we've seen.
Speaker 2 (06:13):
Kids that are enabled and the parents take more care
of the kids than they take care of themselves planning
for retirement, which can be very problematic, So be careful.
I mean, granted, if you can put money away, great,
even a little bit over eighteen years or twenty years
can go a long ways.
Speaker 4 (06:31):
But you also got a way.
Speaker 2 (06:33):
You know, not everybody's going to go to college. We're
big into education, don't get me wrong. But you know,
I know trade schools have great opportunities, and I see
some great success with kids that have gone through trade schools,
and you know, they can actually get a job and
they don't build up all this student debt that some
kids dig such a big hole they can't even get
(06:53):
out of the hole.
Speaker 4 (06:55):
So again, let's face it, the purchasing.
Speaker 2 (06:57):
Power of the dollar today for today's kids isn't what
it was in the olden days, if you will. So, yeah,
we're having these conversations, and you know, my wife and
I we had a difference of opinion. Imagine that in
a marriage, Kim. That's pretty amazing, isn't it.
Speaker 3 (07:12):
I've never heard of that.
Speaker 2 (07:13):
Larry Well, Yeah, well, you know, when I went to college,
my parents made us have skin in the game. And
I don't think that's bad to have skin in the game.
Because then they feel like, you know, they're attached to
it and there's a cost to it and they're paying
for some of it. Granted, if you can bless your
kids or grandkids, we do have. I see this more
(07:33):
often than not, especially with folks that we sit down
with where their grandparents and they're more concerned about their
grandkids than necessarily their kids, and that can be an
effective way of putting money for the grandkids. And we'll
talk about different ways you can do that. But there's
a variety of different ways you can accomplish this, but
(07:54):
it's having the conversations once again, discussing what those options are,
make making sure your life is an adversely affected or
your budget, taking care of you first, and then working
it into the budget to see if it's even a
possibility to be doing it.
Speaker 3 (08:09):
Sure. Yeah, I think that it's really important for people
to understand that saving money for college is great, but
there has to be some strategy behind it, because the
dollars have just gotten so out of control, they're just
so crazy at this point.
Speaker 2 (08:25):
Most definitely, again, the value is still there in an
education and the higher salaries and the higher potential. But again,
some people again come out with so much debt and
then they can't even get a job, or maybe unfortunately
they switched, they switched degrees halfway through and now they
even got more student debt. Again, we're very cognitive of
(08:49):
debt and what that can do, even for young people,
especially for retirees, and you just have to tread that
water very very lightly to make sure that you're doing
what's appropriate and reasonable given your circumstances and you're not
overstepping your boundaries.
Speaker 4 (09:05):
That can cause a lot of problems.
Speaker 3 (09:07):
Yeah, I sure can. So if you're looking for some
advice on how to begin the process of saving for
your college, for your child's college education, or maybe saving
for a grandchild's college education, give the folks at Haven
Financial Group a call. They can talk you through some
of these other strategies that we're going to talk about
(09:28):
during the course of this show, but they can also
just hear out what your plans are and how that
can maybe plan into your your portfolio. How much of
your portfolio maybe you can give up to a student.
The number is six one two five zero four eight
four zero zero. Let me give you that again. It's
(09:49):
six one two five zero four eight four zero zero.
Call the folks at Haven Financial Group. Tell them you
heard us here on the radio talking about saving for
college education and that you are looking for a partner
to help with your strategies when it comes to saving
Havenfinancialgroup dot com. You can also check them out there.
When we come back, we are going to talk about
the rules and the strategies behind for twenty nine's You
(10:12):
heard Kyle say, just a moment ago, he believes you know,
if you are just starting a family and you're thinking
about starting to save money for college, this is a
great way to do it when you have time on
your side. And we'll talk more about that on the
other side of this break. This is the Haven Financial
Group Radio Show.
Speaker 1 (10:31):
Don't go too far. We're gathering more important insights and
retirement ways. Devin, The Haven Financial Group Radio Show will
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kolvig and Kim Karagan. Now back to
the show.
Speaker 2 (10:52):
Good morning, and thanks for listening to the Haven Financial
Group Radio Show. I'm Larry Kalvig, founder and CEO of
the Haven Financial Group. Feel free to give us a
call at any time six one, two, five zero four
eighty four hundred. We love to visit with you and
see where you're at in the planning process for retirement.
Or visit us online at Havenfinancialgroup dot com. There's all
(11:14):
kinds of retirement tools. There's a calendar of educational events
as we do throughout the whole course of the year.
Medicare made simple, investment classes, social security and tax trust
wills and legacy planning, a variety of all the different
retirement subjects that affect you in retirement. And we're firm
(11:34):
believers in the education process. Is Kim and you and
I talk about every single week?
Speaker 3 (11:39):
Yeah? Absolutely. This week we're talking about saving for college educations.
And there might be some people out there who are thinking, hm,
why would we talk about that when we partypically talk
about retirement. But these are two these are two coinciding situations.
You know, you certainly when you're young and maybe you
want to start to save for your kids for their
(12:00):
college education, but you cannot let that eat into your
retirement savings for yourself. So what are the best strategies
to keep them parallel but not crossing lines? And Kyle
Thomas is with US certified financial planner. And Kyle, you
said you have two little ones and you love this
idea of a five five twenty nine. Explain to everybody
what that is.
Speaker 5 (12:20):
Yeah, So a five two nine is a plan for
education savings that you can put into this account. You
can invest it, grow it just like any other type
of account, and you can get a tax deduction for
it depending on what state you're in.
Speaker 6 (12:37):
For Minnesota, if you're married.
Speaker 5 (12:38):
Finally, jointly, you can get a three thousand dollars tax
deduction for contributing.
Speaker 6 (12:43):
To one.
Speaker 5 (12:46):
And then you can also you get that tax deduction.
But then when you take it out to fund tuition
or room and board books, all of that stuff, all
that stuff that applies towards that education expense, it's completely
tax free to take it out. So it is a
great benefit if you can attribute some assets to it.
(13:10):
But there's a lot of other caveats that go into
it too that create some flexibility for you, and you
know some other pieces of information that you can actually
create a little more benefit as well, and we can
get into that.
Speaker 3 (13:25):
Sure. Well, the first thing is early is better. Right,
You have said you have just little ones, and you've
already started.
Speaker 5 (13:32):
Yeah, earlier the better because those compounding returns really add up.
And you know, we've talked about on previous different segments,
the longer you have for time, the more you can
make because those later years in your time horizon is
actually when you make the most money. Because let's say,
(13:53):
you know, five percent on ten thousand dollars is a
lot less than five percent on one hundred thousand dollars, right,
so hopefully we could get to a larger number by
the end of that you know time horizon where they
turn about eighteen years old, and then you're making good
return on that money. And it's that's why it's important
(14:13):
to start very early on.
Speaker 3 (14:16):
So what do these plans actually cover?
Speaker 5 (14:19):
So they cover tuition, that's the big one, and then
room and board, they cover books, they can cover laptops,
internet access. You can get pretty creative with all of this,
and it's very flexible. And it's not just college too.
I mean, you can have this cover tuition for any
(14:40):
kind of further education. If you wanted to go to
a cooking school, if you want to go to trade school.
You know all that, all of those things count towards
five to nine funding.
Speaker 3 (14:52):
So can it yeah, I'm sorry, can it? Can it
pay for tuition? Let's say if you decide that you're
going to send your kids to private high school.
Speaker 5 (15:00):
Yes, it can pay for private high school. There is
caps on that. That's ten thousand dollars per year can
be used for that. Also, of note, you know I
was talking about that deduction. That deduction gets recaptured if
you use it in those years, so it only it
doesn't get recaptured if it's.
Speaker 6 (15:18):
Post high school.
Speaker 5 (15:20):
So but yes, you can use it for private school
kindergarten through twelfth grade. But again, you know, now you're
not allowing for as much compounding interest and gains inside
of there because now you're using it at a lower,
lower education level, So there's not as much time horizon
built in.
Speaker 3 (15:39):
Okay, So let's say that you set up a for
this five twenty nine for your oldest child, and then
your oldest child says, I don't want to go to college.
Can you change it to a different.
Speaker 6 (15:54):
Child, Yeah, you can.
Speaker 5 (15:56):
You can change beneficiaries, so there's flexibility within that. So
child A decides not to go to college, you can
change the beneficiary to child B. Or there was some
legislation passed a few years back that if the five
two nine is owned for fifteen years, you can convert
(16:17):
up to thirty five thousand dollars over that child's lifetime
to roth ira. So but you are subject to that
annual limit. Right now, the annual limit is seven thousand,
So you could convert seven thousand dollars for five years
to a roth Ira for that child who decided not
to go to college. Which that's a huge impact as well,
(16:38):
because now they're converting that savings to completely tax free
growth and they wouldn't be taking it out until age
fifty nine and a half. So think about the compounding
returns incorporating that kind of time horizon as well.
Speaker 6 (16:54):
So that and you.
Speaker 5 (16:56):
Can also change the beneficiary to yourself too, so limited
and who it has to be. It's not just children
that you the you can change it to.
Speaker 3 (17:05):
So Okay, Now, if you start your savings in the
state of Minnesota and then you move to Florida, do
the rules change.
Speaker 5 (17:18):
No, the rules do not change. It's just contributions that
can change. So depending on what state you're in, they
can change and the tax deductions associated with them, because
that deduction is only on the state side, it's not
a federal deduction, so keep in mind everything associated with that.
Then one other thing I want to point out here
(17:39):
too is five two ninees owned by the parent are
included on the FAFSA, So when you go to file
the FAFSA that those assets that your child is a
beneficiary on it's included. One way to get around that
is to have the grandparents be a five two nine owner.
So if you know my children, if one of my
(18:02):
parents or one of my wife's parents owned the five
two nine, that's not going to be included on the FAFSA.
And by the time that they turn eighteen, those assets
could be significant. If you're contributing every year and there's growth,
that could be a huge impact that this college does
not associate with your child.
Speaker 3 (18:21):
Okay, but now what have happened? Forbid it's in someone
else's name, someone else owns it, and then they pass away.
Speaker 5 (18:30):
There are successor trustees for every one of these accounts,
so typically you know that would be if my dad
had a five two nine for my child, I would
most likely be the successor trustee, So then if anything
happened to him, I would become the owner of the
account with whatever child was associated to that account still
(18:52):
being the beneficiary.
Speaker 3 (18:53):
Is that something you recommend?
Speaker 5 (18:55):
Yeah, absolutely, you should one hundred percent set up a
success or trustee just so things don't get murky. And
I think a lot of the companies make you do that,
which is awesome. They make the beneficiary system set up
in case that happens because they probably see it quite
a bit, and it's important that someone else can watch
(19:17):
over the assets.
Speaker 2 (19:19):
So, Kim, you mention, Kim, if I may interrupt, you
mentioned if somebody moved from Minnesota to Florida, why would
anybody move from Minnesota to Florida any particular reasons like taxes, weather,
in a variety of other things.
Speaker 4 (19:33):
Okay, I guess maybe I get.
Speaker 3 (19:36):
I didn't want to be the one to say, but.
Speaker 2 (19:40):
Believe me, we have many clients that are snowbirds to Florida,
so I completely get it. But I think it takeaway here, Kim.
You know it's smart planning. If five twenty nine can
be more than just a college fund, it can be
a powerful, flexible financial tool, and we want folks to
look at all the various tools. So having somebody that
(20:00):
what they're talking about a good partner that is working
on your behalf, looking at all these different strategies and
your family's financial.
Speaker 4 (20:08):
Goals and other goals.
Speaker 2 (20:10):
You know, give us a call, let's get started, let's
have a conversation, and that's really where it starts, and
there is no.
Speaker 4 (20:16):
Cost to do it.
Speaker 2 (20:18):
Feel free six one two five four eighty four hundred
Habnfinancialgroup dot com. We have a very proprietary process. You
get to know us, we get to know you. We
talk through things. We're not in any rush, and we
come up with some strategies, recommendations, suggestions.
Speaker 4 (20:35):
If you think we're a good fit.
Speaker 2 (20:37):
Obviously we're looking to build long term relationship and partnerships
and we work on your behalf, so we'd love to
visit more.
Speaker 3 (20:45):
I really feel like too. Setting up one of these
five twenty nine's is the perfect way for maybe a
young couple to come in and get to know your team, Larry,
maybe they weren't quite ready to start, you know, a
portfolio for a retire but this is a great place
to start with your team and then to continue a relationship.
Speaker 4 (21:06):
Great place to start.
Speaker 2 (21:07):
And if you're a grandparent and you're concerned about your grandkids,
another great place to start. So there's a lot of
good places to start, but the key is get started absolutely.
Speaker 3 (21:16):
Six one two five zero four eighty four hundred. Tell
them that you're ready to start today. When we come back,
we're going to talk about universal life insurance for college
and other expenses. You may never have thought about this
strategy yet another one. Larry and Kyle we're going to
help us talk through exactly how this can be done.
(21:37):
You're listening to the Haven Financial Radio Show.
Speaker 1 (21:41):
Ready to find your financial safe haven. Your dream retirement
is in reach. Don't go away. The Haven Financial Group
Radio Show will be right back. Are you worried that
your financial strategy might be missing something, Well, you're in
the right place. Larry Kolvig is back and ready to
help you find your financial safe haven.
Speaker 2 (22:03):
Welcome back listeners. My name is Larry Kolvig, founder and
CEO of the Haven Financial Group. And if you're just
tuning in, you're listening to the Haven Financial Group Radio
Show on every week from nine to ten. Glad you're listening,
feel free to give us a call six one two
five zero four eighty four hundred or Havenfinancialgroup dot com.
Every week we discuss crucial retirement and financial topics, so
(22:25):
a whole bunch of them that can really make the
difference between surviving retirement and thriving through it. And they
are called the golden years for a reason. We want
to make sure they're as golden as possible.
Speaker 3 (22:37):
I love that Kyle Thomas is with us. He's a
certified financial planner. We've been talking about saving for college
and we're really addressing two different groups. We're addressing you know, parents,
but maybe grandparents too who would like to get involved
in this process. And it's not just a savings plan,
it's a strategy. We talked just a minute ago about
five twenty nine's and now we want to talk about
(22:59):
a universal life insurance strategy. This is something I really
was not very familiar with until we started to go
through this. So I don't know which one of the
two of you would like to talk about it, but
explain how universal life insurance can be a savings tool
for a college education.
Speaker 5 (23:17):
Yeah, this is another tool and it has some similar
characteristics to a five two nine and so a universal
life insurance policy. It gives you flexibility with the premium,
so you can put in, you know, a X amount
and next year. If you wanted to do more or
(23:38):
not as much, you can. You can do whatever you want.
Traditional insurance policies or some traditional insurance policies have a
fixed amount that you have to do otherwise this will lapse.
But this is a universal life insurance policy, so that's
the universal part provides that flexibility. And now when you
(23:59):
make these contrabutions, there's a cash value that accumulates and
the account. Also the policy can be indexed to the
S and P five hundred for example, and there can
be growth associated with that policy, which is what you
would end up drawing on for the education.
Speaker 6 (24:19):
Expenses as well.
Speaker 5 (24:20):
So kind of similar to the five two nine, you know,
where where it's indexed with some kind of stock market return.
It's just a different product avenue to go down.
Speaker 3 (24:33):
What happens if there's big losses in the SMP, for example.
Speaker 5 (24:37):
Well, so with this one, if if there's losses in
the SMP, there is a zero percent floor. So if
you're in the five two nine, you actually lose money
with that one. But with this type of policy, uh,
there is no losses use. So that's the benefit of
having this floor inside of it. And in that way
(24:58):
you don't have losses, which losses are actually worse than
having big gains because losses you rode away and have
a bigger impact than gains. Do you know if you're
looking at the same kind of degree of loss versus gain.
Speaker 3 (25:14):
What are the tax ramifications in a universal life insurance policy?
Speaker 5 (25:19):
So this one is also going to be tax free
as long as it's going to be used for the
college expenses, So loans or withdrawals from the policy or
tax free, giving you the flexibility to not have to,
you know, pay taxes on any of the distributions that
(25:40):
you're using for the college expenses. And then this also,
because it's not technically an asset, it doesn't have an
impact on the FAFTS as well. So back to the
five two nine. You know the grandparent is the owner
or someone who's the non parent if they own the
five two nine, there's no impact. Well, the parent can
(26:01):
own this policy and there's no FAFSA impact because it's
not technically an asset. You're borrowing against a policy and
it doesn't show up on your net worth per se five.
Speaker 3 (26:12):
Twenty nine are used for education. This doesn't necessarily have
to be used for education. You could use this as
a savings tool, correct.
Speaker 5 (26:18):
Yeah, you can use this as a savings tool. You
could use it for retirement if you held onto it
until then. And the way that this works is the
longer that you wait on taking withdrawals from it, the greater.
Speaker 6 (26:33):
The benefit that you receive is.
Speaker 5 (26:36):
So there's a bunch of different universal life insurance policies
and different one structure for different things. But you have
a death benefit protection as well, so that makes sure
that you have a guaranteed amount that the beneficiary of
the account will receive if something ever happens to you.
So you have a death benefit protection with the policy.
(26:57):
So if something happens to the owner of the policy,
see there is still a protected amount that the beneficiary
would receive. You can supplement retirement with it. You know,
if you don't use it all for college, you could
use it for retirement and let it, let it grow.
And it's protected from creditors as well, so you know
in a lot of states, cash value and life insurance
(27:19):
can be protected from those creditors. So if anything happens
and you have debts and liabilities, that that part will
not be taken away.
Speaker 3 (27:28):
So tell me what would happen though, Kyle, if this
insurance company goes out of business.
Speaker 5 (27:33):
So the if the insurance company goes out of business,
that you know that that has happened before. But we
typically only work with insurance companies who are A rated
or better, and those A rated or better companies.
Speaker 6 (27:49):
Typically don't run out of business, and.
Speaker 5 (27:51):
If they do, other insurance companies will step in and
assume whatever debts that that company has. It happens quite
a bit. I mean with banks as well. The government
just doesn't really let that happen, and there's always some
kind of bailout that happens, so people don't end up,
(28:14):
you know, losing their assets that are invested in these companies.
Speaker 2 (28:17):
I'm going to add to that, correct, we typically only
work with A rated companies. There's B and C companies
and for good reason. You know why we only work
with a rate of companies. They're strong, they've been around
a long time. But a lot of these are also
backed up to a certain amount by the state guarantee
fund where they're being offered, so there is protection there.
And I know this segment is talking about universal life
(28:39):
for college planning. I'm going to take it a little
step further here though, If that's something you're interested, certainly
come on in. We can we talk about universal life
if you're if you're younger, and just get the conversation started,
it might be a great place.
Speaker 4 (28:54):
But if you're a.
Speaker 2 (28:55):
Listener and you have life insurance, when's the last time
you had a life insurance review? You say, well, I
haven't in years. How do you know that your policy
is doing what it's supposed to be doing. How do
you know it's not eating itself up? Do you know
if you have a variable life insurance policy, do you
have whole life? What's the cost associated with it? You
(29:15):
really owe it to yourself to get a life insurance review.
We have access to pretty much all the companies here
at Haven. Glennon Isabelle in our office do life insurance reviews.
Speaker 4 (29:26):
We expose a lot of.
Speaker 2 (29:28):
Things that you want to know now rather than waiting
till later and find out, oh my goodness, I just
paid into all this and now it's not going to
do what it was supposed to do. So life insurance
review there's.
Speaker 4 (29:38):
No cost to it.
Speaker 2 (29:39):
It might be eye opening and if it's nothing more
than confirmation that you're in a good spot, great, are
we going to try to sell you a bunch of
life insurance. No, not if you don't need something. I
mean salespeople sell you something sometimes you don't need. But
can it work into your retirement plan? It certinly could.
If you're a high net worth listener. Have you ever
(30:01):
looked at life insurance retirement plans? They're called lurps. Might
be another way too, if legacy is important to you
to pass on to your loved ones, your heirs or grandkids,
so lurps life insurance retirement plans. They've become more popular
since the rules with iras and r and ds, since
the rules changed here about five years ago. So life
(30:22):
insurance has is a broad spectrum of products for a
variety of reasons. Get it reviewed, get it looked at,
and that can piggyback into a long term care conversation,
which nobody wants to have. There's some good options out
there that haven't been around for that long. Let's look
at all the options, find out what's good, bad, and indifferent,
and then at least you'll know and there is no
(30:44):
cost for that.
Speaker 3 (30:45):
Absolutely well, most people don't think about life insurance in
this way. I think a lot of people have some
sort of an old idea about life insurance. You buy it.
You bought it so that it covered your expenses when
you died and maybe left a little something for your spouse.
But life insurance can be you in a lot of
different ways now. And if you're someone who would like
to look into this universal life insurance for college savings
(31:07):
or maybe for retirement savings, be sure you give the
folks here at Haven Financial Group a call six one
two five zero four eight four zero zero. That's six
one two five zero four eight four zero zero. We're
just trying to give you all an idea of the
many options that are out there to help you, maybe
say for your college bound kids, maybe your grandkids, and
(31:30):
of course all of this time to ultimately your retirement.
When we come back well stability and family finances, we'll
talk about that right here on the Haven Financial Group
Radio Show.
Speaker 1 (31:40):
Don't go too far. We're gathering more important insights and
retirement ways Devin the Haven Financial Group Radio Show. We'll
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kolvig and Kim Karragan back to the show.
Speaker 2 (32:02):
Good morning, and welcome back to the Haven Financial Group
Radio Show.
Speaker 4 (32:06):
Thanks for listening today.
Speaker 2 (32:07):
Feel free to give us a call at six one
two five zero four eight four zero zero or Havenfinancial
Havenfinancialgroup dot com. All kinds of tools on the site,
a lot of interaction, a lot of good recipes, even shared.
They're all kinds of good stuff, maybe not just the
stuffy retirement stuff, all kinds of fun stuff. Because as
(32:27):
much as this is serious conversations that we have on
a weekly basis at Haven Financial Group, we like to
have as much fun as possible. We're coffee snobs here, Kim.
You know that we like we have fresh cookies with
every meeting. Maybe that in itself is just appealing. Forget
the conversation. Maybe that's maybe that's good, but we like
to have fun with really important topics. We take it seriously,
(32:50):
but you got to have a spoonful of sugar helps
the medicine go down a little bit.
Speaker 3 (32:53):
Yeah, so so true. You're so right. Six one two
five zero four eighty four hundred. That's how you get
hold of my friends there at Haven Financial Group. We
wanted to talk a little bit about wealth stability and Ultimately,
you know that comes back to your family finances. In
the segment before, we were talking about universal health insurance
(33:14):
life insurance rather and how that can be a tool
for saving and you were mentioning, Larry, you know that
if you're a high net worth individual, that might be
a really great way for legacy planning. Talk to us
a little bit more about that.
Speaker 2 (33:29):
Well, too often bad decisions are made. Maybe the wealth
is created, but it's lost really quickly. I think the
statistics show that seventy percent of wealthy families lose their
wealth by the second generation and ninety percent by the third.
Bad decisions, lack of education, lack of preparedness that can
be even piggyback into not having an estate plan, which
(33:50):
of course provision law. Harry N and Keith are state
planning partners. Do you have a will or trust or
powers of attorney? Do you have an exit strategy? If
you haven't, please take the time. It's well worth it.
Otherwise it's going to cost you your estate and your
kid's time, effort and money. So again, having a long
term vision and creating the financial literacy amongst the family,
(34:16):
having the community, good communication and the discussions in advance, proactive,
not reactive. I understand some families you don't have that communication,
maybe you don't have the relationship, but to the best
of your ability, to get prepared can go a long
way avoiding crisis. Now when you're here in crisis, when
(34:36):
you're gone, I can't. I can't make it any more
important because we see. I bet you I've had a
half dozen or twenty this year where they lost loved
ones and everything's a mess. They never got around to
doing anything, and by that time, oftentimes it's too late.
And that's not meant to put a fear factor in
(34:58):
anybody listening.
Speaker 4 (34:59):
It's reaction.
Speaker 2 (35:00):
You know, the mortality rate in the United States is
one hundred percent. We're all going someday.
Speaker 4 (35:06):
I heard there was. I heard there's a few that
actually did.
Speaker 2 (35:09):
But that's a talk for Sunday morning, which today is
Sunday morning, so I guess we can go into that.
Speaker 4 (35:13):
As well, not for today.
Speaker 2 (35:15):
So again, proactive not reactive. Having a plan a failure
to plan as a plan to fail. None of us
want to, but so many families do because they're just
not prepared.
Speaker 3 (35:27):
You know, I think so many people who are listening
to this may be thinking, well, this doesn't really apply
to me because they don't have a lot of dollars.
But planning for you know, your your family's future, and
planning for what may be left behind.
Speaker 4 (35:42):
Everybody has that almost definitely, I don't.
Speaker 2 (35:46):
We're speaking to those that have very little and those
that have a lot, and every single listener in between. Somehow,
some way this is going to affect you. And again
a lot of times the state planning, oh, that's only
for the rich people. That could not be further from
the truth. Do you want to avoid probate? It only
takes seventy five thousand of probatable assets in the state
(36:07):
of Minnesota to get a formal probate, which most would.
Speaker 4 (36:11):
Want to avoid. The question is how do you avoid it?
Speaker 2 (36:15):
Beneficial interests, life insurance, how do you protect assets? Maybe
spend down process for the nursing home. These are all
not fun, comfortable conversations, but important conversations to protect whatever
you have put together, small, medium or large. Whether you
have no kids or eight kids, or commingle or commingled
(36:38):
assets with a second marriage, there's all kinds of different
dynamics or lack of dynamics. What do you do to
prepare for the unknown when it happens.
Speaker 4 (36:48):
That's what it's about.
Speaker 3 (36:49):
And you know, I think one of the things that
people aren't thinking about frequently is the tax ramifications. That's
something that you really need to sit down and talk
with an expert about.
Speaker 2 (37:00):
Well, you know, Lances are in house CPA and we
do lots of tax planning and we have lots of
tax discussions as it relates to retirement, income streams, etc.
But yes, if you pass away, different states have different
rules when it comes to an inheritance tax or an
a state tax at the federal level, at the state level,
(37:22):
what do you do to avoid or minimize that is
a revocable trust the right thing to do irrevocable trusts.
Getting educated about these things so you don't get something
you don't need, but you better make sure that you
have what you need when it comes to that. So, yes,
taxes are relevant, and a lot of times people pay
(37:42):
on taxes unnecessarily just because there was a lack of
preparation or maybe a lack of a financial tool that
could have been used. So we like to explore all
the options and that really comes with ongoing conversations.
Speaker 4 (37:56):
We see folks getting inheritance.
Speaker 2 (37:58):
Just this last week, I probably had two different couples
that came in who just are in the process of
receiving an inheritance. How do you bring that into your
asset mix? Okay, how do you want it invested? Is
there going to be a tax ramifications that you definitely
want to be prepared for avoiding those negative surprises.
Speaker 4 (38:19):
That's what we're trying to avoid.
Speaker 3 (38:20):
Sure. Another thing about this, Larry, that seems pretty important
when it comes to protecting generational wealth is the idea
that you need to establish a family governance. And I
think you know you sort of mentioned this before, but
you would rather establish that while you're here than leave
(38:41):
it to those who are left behind to make those decisions.
Speaker 2 (38:46):
Yeah, let's face it, if you have more than one
child or don't have any, there's going to be different dynamics,
different ones you want in control of things if something happens.
It's why a durable power of attorney for financial maybe
different than a durable power of attorney for healthcare or
you're living will, Who's in charge? You know all those
type of things. Who do you want to be in charge?
And a lot of times people said, well, I don't
(39:07):
have anything in place legally, and because I don't know, well,
what about a friend, a neighbor, a parent, a pastor
your kids whoever. Keep in mind, if you have an
appointed lawful attorney. In fact, in essence, what you've done
is you put the state where you live in control
of your affairs. If you can't speak for yourself, if
(39:28):
there's an accident or whatever, that might happen. So if
you're eighteen, everybody should have those powers of attorney. Otherwise,
what happens is the state takes over your finances in
the form of conservatorship or in the form of a guardianship.
Speaker 4 (39:45):
Now they're your parent as well.
Speaker 2 (39:47):
So I don't think any of us want that to
be that to happen, but it happens all the time.
Avoid the mistakes that potentially could happen. You say, nothing's
ever going to happen. Nothing's ever going to happen until
what Until something happens, it happens, and by that time
it may be too late.
Speaker 3 (40:04):
And then there are those who would that generational wealth.
Maybe they feel it's more important for it to be
passed on in a charitable way versus maybe through their errors.
Speaker 2 (40:16):
And we love to see and we do see a
lot of our clients that are very charitable and in
our conversations and initially we ask do you have it?
Speaker 4 (40:24):
Are you charitable?
Speaker 2 (40:25):
Now you don't give charitably for tax reasons, but I
am always We're always anxious to hear about passions that
people have with different charities.
Speaker 4 (40:33):
We're at Haven, we're financial group.
Speaker 2 (40:35):
We're passionate about Cando canines, you know in our office,
our local churches, and a variety of different things which
I love to hear about. And for many of our
clients that is important. So how do you get it
to your favorite charity in the most tax efficient way
possible even when you're living. We do qualified charitable distributions
(40:55):
for clients required minimum distributions. And then when you're gone,
who do you want it to go to? A revocable
trust is oftentimes the best way to do that. So
all we're looking at is what fits your long short term,
your midterm, your long long term goals, and how do
we get to the finish line and how do we
get to happen what we want to happen and leave
(41:18):
your family in the best situation possible. That's ultimately the goal.
We're not trying to make it complicated. We're trying to
simplify things before things get to that point.
Speaker 3 (41:29):
And this is one of those things in your life, folks,
that you need a partner. It's been a reoccurring theme
throughout this entire show. But if you're looking for a
partner to help you make sure that your family wealth
is stable. And when I say family wealth, it just
means you know, your family finance is what you've worked
so hard all of your life to make sure that
(41:52):
it's stable and that it has passed on to your
loved ones or to wherever you'd like for it to
go in the manner in which you had hoped. If
you're looking for someone to help you do just that,
it's six one two five zero four eight four zero zero. Again,
that's six one two five zero four eight four zero zero.
That is the number to reach the folks at Haven
(42:13):
Financial Group. Tell them you heard us here in the
radio and you'd like to sit down and have a
first discussion about whether it is you know, passing on
generational wealth, if it's saving for college, or it's putting
together a great portfolio that's going to give you the
golden years that you're looking for again one more time
six one two five zero four eight four zero zero.
(42:36):
We've had a lot of information in a short period
of time, Larry.
Speaker 2 (42:39):
A lot of information. Kyle, thanks for being with us
and Kim, we'll see you next week. Thanks for listening.
Speaker 6 (42:44):
Thank you.
Speaker 3 (42:46):
Investment advisory service is offered through Guardian Well Strategies LLC.
Speaker 5 (42:50):
Haven Financial Group and Guardian Well Strategies LLC are not
affiliated companies, and investments involve risk, and, unless otherwise stated,
are not guaranteed.
Speaker 3 (42:58):
Please consult with the qualified fiveinancial advisor and or tax
professional before implementing any strategy discussed herein and comments regarding
it safe and secure.
Speaker 1 (43:06):
Investments and guaranteed income streams only refer to fixed insurance products.
They do not refer in any way to securities or
investment advisory products. Fixed insurance and annuity product guarantees are
subject to the claims paying ability of the issuing company.
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