Why choose a 529 over WL?

[James]

It is always good to have a choice, I think the point has been made. As far as projections go, well depends upon where you start. The fund carrying 5 plus percentage points in charges will never compare, if you compare the Cash Value side of the PWL. Just don't forget to add in the guarantee gain along with the dividend gain on a PWL. Not to mention the restrictions of qualified expentitures of the 529.

Plus this guy was a prospect, I wouldn't call him a Client. I'm not sure what he was happy about?

 

[Newby]

I guess I have the dumbest plan of all. I don't think parents should entirely pay for their kids college.

My son's in college right now. I told him his choice is this, live at home and go to the local college (University of Southern Indiana) which is good but one of the cheapest in Indiana and I pay 50% for a 4-year degree.

While he's in school I require him to work and stockpile money so he doesn't have a bunch of loans when he is paying his last two years.

I don't believe in going into heavy debt for a college degree and I don't believe parents should feel obligated to pay for college.

My son is getting straight A's and works a full-time job on top of school. He has stockpiled $12,000 so far making only $8 per hour as a sales clerk at a shoe store. I also require him to pay his own health insurance and all auto expenses on his "beater" car.

I believe this builds character. Did with me. Today I definitely know the value of a dollar. Making it too easy on them leads to a bunch of "entitled" idiots who aren't ready to work when they get their degree.

 

[slushhhpuppie]

"usually they don't pay the rep anything"

That doesn't mean they're not a good plan.

When you are the rep, yes it does.
I donate to charity but I'm not running one .

 

[slushhhpuppie]

Here is some numbers from one of the funds that I found on American Funds CollegeAmerica, it being the, [FONT=Minion-DisplayRegular*1]American Balanced Fund, about average I would suggest.
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[FONT=NewsGothicBT-Bold*1]Now we have to understand, that the Fund Return does not equal your return! We have to view cost in this plan, and the ups and downs as this is what will effect your rate if you had to take money out at the wrong years;[/FONT]​

[FONT=NewsGothicBT-Bold*1]What this suggest is that any given year you can have a really bad run, if that money is being pulled out shortly afterwards the effect of lost is real, not a paper lost.[/FONT]​

[FONT=NewsGothicBT-Bold*1]Now if some financial planners here want to go into another "Highly Recommended" advise, which is to leave the equities side and move the money over to a safer Bond related investments that this same fund is posting around 4.5% return also, having a drag effect of actual earnings of the participant.[/FONT]​

[FONT=NewsGothicBT-Bold*1]

[FONT=NewsGothicBT-Roman*1]I'm sorry guys but this doesn't seem like the best plan I came accross![/FONT]​

[/FONT]​

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Why are you using A shares to compare?

Avoid front loads of 5.75 on A shares by buying C shares, you pay 1% 12-b1 trail off the top of the return (not on the initial investment).

Are the expenses of a WL policy less that 1%?
What WL policies have the same tax-advantaged growth as a 529?

 

[CHUMPS FROM OXFORD]

This post was deleted. It was extremely offensive and I deeply apologize to all that were offended. My conduct was abhorrent and I will naturally resign from this Forum...IMMEDIATELY.

 

[djs]

Writing 529's, even when you get paid a commission, tends to be charity work when you consider the time and overhead for that monthly $50 contribution. I do it for my clients, when appropriate, simply because it is a value add service I provide. My goal is that it moves beyond just a 529.

Dan

 

[James]

Why are you using A shares to compare?

Avoid front loads of 5.75 on A shares by buying C shares, you pay 1% 12-b1 trail off the top of the return (not on the initial investment).

Are the expenses of a WL policy less that 1%?
What WL policies have the same tax-advantaged growth as a 529?

Wow, C shares, I was wondering what the response was going to be? C shares, yea sure.

 

[James]

• • <H2>Class A and 529-A shares

  • • You pay the sales charge at the time of purchase.
    • You will pay lower annual expenses.
  • Class B and 529-B shares
    • If you sell your shares within six years, you will pay a sales charge.
    • You will pay higher annual expenses than Class A and 529-A shares for eight years.
    • Class B and 529-B shares convert to Class A and 529-A shares, respectively, after eight years.
  • Class C and 529-C shares
    • If you sell your shares within 12 months, you will pay a sales charge.
    • You could pay higher annual expenses than Class A, 529-A, B and Class 529-B shares.
    • Class C shares convert to Class F shares after 10 years. Class 529-C shares do not convert to Class 529-F shares.
  • Class F and 529-F shares
    • You pay an asset-based fee determined by your financial professional, as well as slightly higher expenses than Class A and 529-A shares.
    • You pay no upfront or contingent deferred sales charge.
    • These shares are offered only through participating financial professionals.

  </H2>

There is no free ride within a 529, just various ways for them to charge ya!

 

[djs]

There is no free ride within a 529, just various ways for them to charge ya!

Correct. There are many options. With a WL policy, the expenses involved usually don't have options, you just pay them.

James - your avoiding the whole part about expenses on a life policy. I'm not sure why.

Dan

 

[CHUMPS FROM OXFORD]

Also...dividends ARE NOT guaranteed. And we all know that dividend projections often fall short.