Glenn J. Downing is a co-founder and principal of CameronDowning. In addition to his personal financial planning practice and CFP® instruction, he is a Board Member and past President of the Financial Planning Association of Miami and member of the Estate Planning Council.
Glenn has been a CERTIFIED FINANCIAL PLANNER™ practitioner since 2006. An experienced CFP® instructor, has been involved in teaching the certification curriculum since 2006. He has taken seven cohorts through all seven modules of the Ken Zahn certification curriculum. In 2018 he transitioned to teaching the 4-day Live Review to those ready to sit the CFP® exam.
In February of 2010 Glenn was honored by being invited to become a Board member of the Miami-Dade Citizens’ Independent Transportation Trust, representing the voters of Commission District 11. This Trust was established by legislation in 2002 when Miami-Dade voters increased their sales tax by ½ penny to fund transportation infrastructure improvements, and which oversees all disbursements from that revenue. The signature projects partially funded by surtax dollars to date are the completion of the Orange Line Airport extension of Metrorail, a replacement order for all new Metrorail cars, and the replacement of the bus fleet. In 2017 he was elected to Chair the Trust, and remains active in transportation issues in Miami.
Glenn grew up in Connecticut, and received his MBA from UCONN in 1984 with a finance concentration. He has been working in the financial services industry since moving to Florida in 1997.
MBA, Finance, University of Connecticut
Assets Under Management:
#Florida life license
Personally, I like to see my clients buy insurance for insurance, and investments for investments.
If you look at your policy from a stricly investment point of view, at this time you have a loss. After the policy has been in force for years and years you may have an IRR on your cash approaching 5%. But if you look at this as strictly insurance, and the policy paid out (meaning the insured died) the IRR would be huge.
To answer your question: As with any insurance policy, you are paying for coverage. When your auto policy renews after 6 months, you don't look at the money spent as lost, do you? No - you paid for needed insurance. That's the issue here. The question becomes "Do I have the right insurance for my cirumstances?" If you are maxing out your retirement plans and looking for another opportunity for tax-deferred growth, and have an insurance need, this is a good choice. If not, and you have no health issues, I would consider replacing this policy with term insurance and investing into your retirement through IRAs work employer-sponsored plans.
Tell your sister to go to an attorney and draft a will properly, naming the beneficiaries she chooses. Pass this hot potato on!
The taxation of Social Security benefits depends upon a formula called Provisional Income.
Basically, add up all your income - wages, investment income, including tax-free bond income, rental income, etc. Add to that sum 1/2 of your annual social security benefit. If that result falls between $32K and $44K, then 50% of the social security benefit will be taxable. If that number exceeds $44K, then 85% of that benefit will be taxable. NOT that the benefit will be taxed at 85% - just that 85% of the benefit goes on your 1040 along with all your other taxable income.
From the numbers you gave, 50% of your $25K Social Security benefit, or $12,500, is taxable.
Hard to answer without more details. But generally, yes. You would be using your home as collateral for a recourse loan - meaning you're pledging your house as collateral, and giving the lender the option of foreclosing against you should you stop making payments. Are you sure this is what you want? If you need some quick money, look at a 401K loan. No credit check.
Let me start with the indexed annuity. You will earn over time probably 2-3 points above current CD rates. You can certainly use the conservative part of your allocation here, as opposed to bonds, which will continue to drop in price as the Fed increases interest rates. Yes, the maximum interest crediting may be much higher than that, but remember that the participation rate and maximum crediting both move year by year at the discretion of the insurance company. My point here is that at age 63, your retirement could easly span 30 years. Consequently I'd recommend that you have at least some money invested for long-term growth.
Whether the account you'll draw from now is in the 401K or an IRA doesn't matter tax-wise, as you've aged out of any 10% penalty. Look at the underlying investments available to you in 401K vs. the entire universe of investments available to you in an IRA.