August Mailbag with Sean Gates

Automatic TRANSCRIPT

Insurance term retirement plans and cares act distributions all that and much more on this week's episode of Motley Fool Answer. Sean welcome back. It's been a while I think how long has it been since you've been on the show? January twenty twenty. There we go. Bro Circle this calendar with a big heart. Thanks for having me for those of you who don't know China's a financial planner with molly full wealth management. Sister Company is I'm Ali. Full. A little bit faster on that uptake I feel but. Yes Sean have you been? How's he been? Have you been everything's awful but have you been? Better than I. Deserve. Yeah it's very fortunate. I feel bad. I just got back from Colorado. It was nice I left before the fire started. So perfect timing way. Have you been this whole time? We were there were. So we were on a road trip for about two months just working remotely. Wow. RV. Microbus with the pop-up camper unfortunately we. An RV, but I think everyone is doing that. So the prices were insanely high. Yeah. So we actually looked at buying one thing I could just buy one and then sell it maybe even make a profit because so many people were looking for it. You could do friend of the show Gregor Blanco they have a little camper I'll bet you could ask very nicely to borrow his and he might be willing to loan it to you not to put him on the spot Greg actually maybe Greg doesn't listen anymore he doesn't have his two hour commute every day so anyway Give it a. that's just a tip for Robert broke camp by the way not for all of our listeners. Here's Greg's email address. adorable camper alone idea. All right. Well, let's to the mailbag showy. Question comes from John. Has there been much research done on the economic pros and cons of not having kids. I know the government wants us to have kids because there are tax benefits to doing. So and obviously there are benefits to having someone quote take care of you when you're older although it's not a given that they will but the price of having kids is pretty high too. So, if you look at the economic pros and cons of having kids I, have to say it's probably mostly cons. Who has actually run the numbers? It's the US Department of Agriculture that produces a report that talks about the expenditures on children by families the most recent. Report came out for children that were born in two, thousand fifteen, they break it up by income so. households. That have a household income of less than fifty, nine, thousand, two, hundred. Costs a little less than ten thousand dollars a year to raise a kid and we're talking about a two kid family, but it's still ten thousand per kid. Middle Income which they qualify as fifty nine, thousand, two, hundred to one, hundred, seven, thousand dollars those folks about thirteen thousand dollars a year and higher income, which is more than one hundred seven thousand dollars costs twenty thousand dollars per year. And then they? They actually total up to age seventeen. So this does not include college total expenses for raising kid for the lower income folks hundred, seventy, four, thousand dollars middle-income two, hundred, thirty, three, thousand dollars upper income, three, hundred, and seventy, two, thousand dollars. So, from a pure financial perspective their. Drawbacks to having kids. Instead invested all that money. You would have. Plenty of money to cover your long term care expenses so you wouldn't have to worry about that. Just from a personal perspective I would say that most of the happiest memories of my life of involve my kids and I wouldn't trade those for a bigger 401k or a better long-term care policy. But that's just me and I think I actually know people who probably would make that trade. Well feels like if you're sitting there asking yourself should I have kids because it makes financial sense the answer is no. You probably should not have kids just all around not built not built for this. So go enjoy traveling the world with a suitcase of money. This is like those questions I get where people are like, what's the secret financial planning to improve my life and it's like there are no. There are there are no secrets to kids are just a money drain unless you have like Lebron James is your kid I don't know. That's true. So that's the answer have Lebron James or don't have. Good. Luck with that. Next question comes from Stewart I was just listening to a book about reducing taxes in retirement and the author was touting the benefits of. Bro. Is this going to be pronounced lurks, blurbs? Not. WHO Lurking. Life Insurance retirement plan, and Roth. IRA's at one point. I had a universal life policy but liquidated it because of the cost and did not feel I actually needed the insurance since I had a term policy and life insurance through my job could you discuss how one determines the trade off between investing in a loop which has the cost of insurance investment options the best of which appear to be index funds, some complicated rules and tax free quote withdrawals versus the possible higher returns and higher taxes of investing in stocks or other investments with after tax money. Anytime someone starts to talk about investing in insurance, you're should have alarm bells going off insurance is really

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