You know, I think that is the issue - we are not nearly as adventurous as ds. He is very outdoorsy. My idea of an outdoor activity is having cocktails on a patio - lol.
You have a pretty low tolerance threshold if merely âseeingâ a thread on a page bothers you. No way of hiding it, so itâs up to you to figure out a way to just skip on by and not be bothered.
Providing a 401k to employees, even in a small startup, is very inexpensive. They donât have to provide a match, but to not have one at all is a real shame. It can be outsourced for a few hundred $ per month cost to the employer or less - total, not per employee.
Their current payroll company may offer a plan, or thereâs lots of other companies that will handle it.
Is contributing to kidsâ 401k all that different from giving money when they are old, as in their retirement age? If thatâs the case, wouldnât it be better to leave them alone and make them feel they are making it on their own? They will inherit anyway helping their retirement.
Maybe, but the time value of compounding is hard to top. If you fund kids ROTH to the max for 10 years, starting at age 25 and they never add to it again, the end result at retirement is something like $650,000 (of course that makes some growth rate assumptions). If the choice that you are able to make is to give 50k now or to let them inherit that much, giving it now is a bigger benefit to them. But as usual with money advice YMMV.
DH & my philosophy is to help the kids now when they can appreciate the Roth funding, down-payments, family vacations, etc., that would be a struggle to pay for otherwise. Both are in career jobs and are financially responsible.
I suppose weâll get some inheritance from my mom (minimal) and DHâs mom (more $$ there), but we really donât need it now. As mentioned above YMMV.
P.S. Paying off the mortgage today. Woot woot!!!
It certainly seems like a wise financial move to help your kids with their Roth, if you want to pass money onto them (and you can afford to do so). As @scmom12 mentioned, hard to top the time value of compounding, especially when its tax free, and when theyâre young. Who knows how long Roths will be around, anyways.
My oldest worked for some smaller startups, and said never again. Even though they provided 401Kâs, he said that many of them just pay you less than youâre worth, and work you more, with the promise of equity paying off in the future. While there are a few unicorns out there that could make the employees very wealthy, the vast majority of them will not, rendering that equity useless. A 401K would be more valuable to most people, and the companies could provide equity also. But I realize most of these startups run lean because they are in need of funding.
In theory, they will inherit what $50K has grown to, not $50K. On that front it is a wash.
Not necessarily a wash. At their age, kiddos would likely to invest in higher risk/higher returns stuff. At our age, the mix of assets is likely going to be more conservative, so less growth. Of course, there is always that risk⊠
If it is invested in their Roth IRAs, it will grow taxfree and be withdrawn taxfree. We have been giving money to S to contribute to his Backdoor Roth IRA for years.
Our kids have had Roths since they had earned income. Kids put in a little, we added enough up to $5500 or earned income. Gift it every year to S1, D1 when employed (now in dental school so no income), D2 every year, though she only makes a few thousand per year. All accounts are invested aggressively.
âP.S. Paying off the mortgage today. Woot woot!!!â - @aMacMom thatâs wonderful! Weâd like to pay of ours (DH retires next month) and have the money set aside. At the moment, the paperwork deters us since lots of other things going on.
Is it a pain to get the insurance and property tax switched over to self-pay?
@shawbridge, your post reminded me of our trip about 20 years ago where we took a helicopter ride to stay at Purcell Mountain Lodge. It was kind of an odd place. We went in the summer, but the mountain was covered in snow. There were several of us, from late 30s to 70s, and we were using big blue tarps to slide down a pretty long ways on the mountain. It was great fun. Hiking was wonderful. I will have to see if that place even exists any longer.
https://www.nolo.com/legal-encyclopedia/can-i-rid-mortgage-escrow-account-pay-property-taxes-insurance-own.html indicates that it depends on the type of loan and the lenderâs policy. Whether you have at least 20% equity (<= 80% loan / value) can matter.
Call your lender.
When we paid off House1 mortgage, the insurance renewal and property tax notices went to our home address. The lender (Chase) apprently notified the insurance co and county. They do not give a hoot who pays on your behalf - as long as the bill is paid. Kiddie condo was paid with cash. I just got the property tax info out of my mailbox and I personally arranged the insurance which I paid when I got it. But you have to remember and budget for those.
I think @colorado_mom is asking about doing this after the mortgage is paid off, after which the lender has no right to collect escrow payments, because there is no loan.
Switching is trivial - just stop sending them the money and start making the payments yourself. Getting the balances back from the escrow company, that might take a bit more work unless everything works smoothly after the loan is paid off.
One thing to pay attention to is whether you get the discharge in a few months. Banks/mortgage companies are notorious for not recording the discharge, and it will become an issue when you sell or take out another mortgage, because the title wonât be clear. Then everyone has to scramble around to find out who owned the loan, whether they are still in business, who is responsible for doing the discharge, etc, and it causes a lot of stress because it never comes out until the last second. Ask me how I know. B-)
Thatâs what I meant, @notrichenough. She can probably call the lender and ask whether they would forward the info or she herself needs to make the calls to the insurance co and county.
D1 was not qualified for Roth a year out of college. She is the one who told me about backdoor Roth, https://www.rothira.com/what-is-a-backdoor-roth-ira.
D1 and her H has a pre-nup. They are about to purchase their first apartment and they have a formula of % of ownership based on their contributions to the downpayment.
Thanks @colorado_mom! We did coordinate the final payment with the mortgage lender. Our insurance/property tax is not in escrow, so no issue there.