Kristen’s financial advisor charges a 1.3 percent fee on her investments. They also sold her term life, whole life, and long-term disability insurance. Do they have her best interests at heart?
Casey has $290,000 in student loan debt. He committed 10 years to one employer for a chance at public service loan forgiveness. But five years in, Casey questions what he’s missing out on.
Sara feels like it’s time to move to a more conservative asset allocation but she’s torn between buying bonds from Vanguard or Treasury Direct. What’s the difference anyway?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it here.
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Kristen asks (at 02:58 minutes): I recently linked up with a fiduciary financial advisor offered by my work.
I enrolled in term insurance, whole life insurance with an accelerated care benefit, and long-term disability.
Am I making the right decision by contributing to these plans?
I’m 34 with two children, a three and a five-year-old. I make $180,000 a year and plan on retiring when I’m 50.
I max out my Roth 401k from work and contribute to a backdoor Roth IRA as well.
The term insurance covers 20 years. It costs my husband and me $37 and $56 a month, respectively.
The whole life is paid up at age 65 for $150,000 with an accelerated care benefit, including nursing home long-term care. It provides $125,000 a year for long-term care services. It costs me $281 and my husband $286.
The long-term disability covers up to $9,000 a month until age 70 and costs $262.
In total, we’re paying $922 a month. A lot of financial blogs advise against a Whole Life policy, but my financial advisor recommended it based on the accelerated care benefit.
Additionally, our advisor charges a rate of 1.3 percent from my Roth IRA and brokerage accounts.
Is our money better spent elsewhere?
Casey asks (at 30:55 minutes): Should I commit to my job for five more years to qualify for public service loan forgiveness?
I graduated from medical school last June and started a career as a physician making $240,000 a year. I have $290,000 in student loans.
I’m halfway through the 120-month period where I can apply for public service loan forgiveness. I’m fairly certain I want to continue working with the 501(c)(3) company that I’m with.
I save $1,500 monthly in a brokerage account. I also max out my 401k and 457 plan.
I feel good about staying on track but I’m wondering if I’m missing out on other opportunities.
Sara asks (at 48:14 minutes): How should a high one-year treasury yield factor into my asset allocation?
I’m 35. I have $500,000 in retirement savings with less than 10 percent invested in bonds.
I’d like to move towards a more conservative approach and increase my bond allocation to at least 10 percent.
But, I’m confused about the relationship between bond prices and yields.
What’s the difference between bonds that I’d buy through Vanguard versus buying bonds directly from Treasury Direct?
I also have home improvement goals. Are Treasury Direct one-year bonds a good savings vehicle for that purpose?
Resources Mentioned:
Investopedia Form ADV | Website
NY Times: Long Term Care Insurance | Website
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