Tweet
Dr Dahle, I appreciate the knowledge base you’ve built in the WCI community. I found my way here via your podcast, and I sure hope you and others here can help me to stop doing dumb things with my money.
My questions revolve around investing for retirement while I am receiving long term disability payments. I have an autoimmune condition with a chance of remission, but after 5 years of exhaustive treatment and continued symptoms leading to frequent hospitalization, it’s seeming less likely that I’ll be able to return to the workforce, and not as a physician in my field. My options for investment seem quite limited while I am unable to earn any income. I spoke to a financial planner who told me to consider a variable annuity without insurance components, to be used solely for tax-deferred growth. I was completely unfamiliar with this type of product, so I held off. My understanding is that they tend to be costly ways to invest and I’m not sure it would be worth the tax savings. (I have not yet obtained the specifics on cost and fees for the product recommended by that advisor).
I do a back-door Roth conversion each year I can’t contribute directly and I max out my HSA contributions each year. I’m in the process of setting up a taxable Vanguard account.
Also, I have a variable universal life policy that I despise but feel stuck with for another 5 years until the surrender period ends.
I’m interested in establishing passive income streams (I’ve had not-quite-passive rental income in the past) and utilizing such a side business as a way to invest in self-employed retirement plans. However, my health has not yet been stable enough to do the upfront work of establishing those streams. It’s something I hold as a goal over the next year, likely through some managed “turn-key” real-estate investing.
Some background and details:
Age 38, single
Income: $188k from two own-occupation LTD plans, $125k taxable (W-2 reads “sick pay”) and $63k non-taxable.
403b: 145k in vanguard and AM funds, $24/mo in fees
Roth IRA: $46k in a managed account, $20-40/ mo fees
VUL Insurance- 2M death benefit, $49k cash value, $20k surrender charge, 6% load and a $464 ‘administrative fee’ monthly for the next 5 years yet in addition to $106 policy premium. Basis (I think) is $78k. Contributing $600/mo underfunding for past couple years.
Savings: $88k in a money market account. $40k should stay as cash reserves (some of my treatments cost about $36k and I cover them while insurance does it’s prior-auth dance). $48k needs to be invested.
I have a life insurance policy from my previous employer that I am planning to close out on, as I have no dependents. $377k death benefit, $1900/yr premium, after the surrender charge I could cash out $1600. I haven’t closed it out yet while I figure out what I’m going to do with the VUL.
Debts: $146k school loans at 0.625% (that is not a typo)
30k car loan at 0% financing
92k home loan at 4.5%, I’d like to pay it off early.
Cash flow is quite comfortable with about $5k/mo to invest beyond my current investments. Modifications to my house for accessibility have been completed. My cash reserves are flush.
The only worry I have is if insurance coverage changes and doesn’t cover a weekly infusion upon which I’m dependent. It’s $14k cash price per week, and $5k for the insurance price. That’s a lot to cash-flow, hence my goal to build up some rental income.
I need to get this money invested so it’s earning it’s keep! I’m pretty much a newbie when it comes to finances beyond a simple checking and savings account, so I’m not sure the best account to invest in now, and what types of funds to choose within that account. I also don’t know if or how I should get rid of that darned VUL policy. Your insight and suggestions are most welcome!
My questions revolve around investing for retirement while I am receiving long term disability payments. I have an autoimmune condition with a chance of remission, but after 5 years of exhaustive treatment and continued symptoms leading to frequent hospitalization, it’s seeming less likely that I’ll be able to return to the workforce, and not as a physician in my field. My options for investment seem quite limited while I am unable to earn any income. I spoke to a financial planner who told me to consider a variable annuity without insurance components, to be used solely for tax-deferred growth. I was completely unfamiliar with this type of product, so I held off. My understanding is that they tend to be costly ways to invest and I’m not sure it would be worth the tax savings. (I have not yet obtained the specifics on cost and fees for the product recommended by that advisor).
I do a back-door Roth conversion each year I can’t contribute directly and I max out my HSA contributions each year. I’m in the process of setting up a taxable Vanguard account.
Also, I have a variable universal life policy that I despise but feel stuck with for another 5 years until the surrender period ends.
I’m interested in establishing passive income streams (I’ve had not-quite-passive rental income in the past) and utilizing such a side business as a way to invest in self-employed retirement plans. However, my health has not yet been stable enough to do the upfront work of establishing those streams. It’s something I hold as a goal over the next year, likely through some managed “turn-key” real-estate investing.
Some background and details:
Age 38, single
Income: $188k from two own-occupation LTD plans, $125k taxable (W-2 reads “sick pay”) and $63k non-taxable.
403b: 145k in vanguard and AM funds, $24/mo in fees
Roth IRA: $46k in a managed account, $20-40/ mo fees
VUL Insurance- 2M death benefit, $49k cash value, $20k surrender charge, 6% load and a $464 ‘administrative fee’ monthly for the next 5 years yet in addition to $106 policy premium. Basis (I think) is $78k. Contributing $600/mo underfunding for past couple years.
Savings: $88k in a money market account. $40k should stay as cash reserves (some of my treatments cost about $36k and I cover them while insurance does it’s prior-auth dance). $48k needs to be invested.
I have a life insurance policy from my previous employer that I am planning to close out on, as I have no dependents. $377k death benefit, $1900/yr premium, after the surrender charge I could cash out $1600. I haven’t closed it out yet while I figure out what I’m going to do with the VUL.
Debts: $146k school loans at 0.625% (that is not a typo)
30k car loan at 0% financing
92k home loan at 4.5%, I’d like to pay it off early.
Cash flow is quite comfortable with about $5k/mo to invest beyond my current investments. Modifications to my house for accessibility have been completed. My cash reserves are flush.
The only worry I have is if insurance coverage changes and doesn’t cover a weekly infusion upon which I’m dependent. It’s $14k cash price per week, and $5k for the insurance price. That’s a lot to cash-flow, hence my goal to build up some rental income.
I need to get this money invested so it’s earning it’s keep! I’m pretty much a newbie when it comes to finances beyond a simple checking and savings account, so I’m not sure the best account to invest in now, and what types of funds to choose within that account. I also don’t know if or how I should get rid of that darned VUL policy. Your insight and suggestions are most welcome!
Comment