I never want my kids to go through what I went thru
This week’s Finance Friday post was originally going to be about sticking to New Year’s Resolutions.
It is after all already February and since I’ve been reminding myself to stick to mine I was planning to remind y’all about sticking to yours.
But then things started to hit me in waves and before you know it, I’m aware and dealing with the emotional scars of my childhood and then on this week’s SAC podcast me and the girls are talking about being trapped in abusive relationships.
How does this tie into Finance Friday you ask? Check it- after that show dropped my team got emails from women listeners explaining that the “fear of financial insecurity” kept them in abusive relationships and marriages. They were scared of not having anywhere to sleep if they escaped with the kids because it’s the man that has all the money and money equals control.
If someone is trapped today they need more help than I can give- but what about my kids- what can I do today so that I can give them cash in case of an emergency. After that, we recorded that show I thought about my own kids. What can I do to protect them from being trapped by another person’s money?
The IRS has set up special accounts for retirement savings (401K). The IRS set up special accounts to save for your kid’s college (529 Plans). But what about a savings plan to protect my kid from bad, dangerous temporary situations when they need cash and need it penalty free- you know the IRS has rules about withdrawing and if you break those rules it costs you at least 10% not to mention additional taxes.
There is a way to do this, so the money can be used for any purpose including an escape fund. It’s a life insurance policy.
There is a type of life insurance policy that allows a person to withdraw money from it tax-free (technically it’s a loan but you never have to physically write a check to pay back). Before you freak about using a life insurance you should know that people have been using life insurance to save for their kid’s futures for well over 100 years.
Insurance companies call them Juvenile Life Policies and instead of insuring the parent’s life you’re insuring the child’s life. These policies remain “InForce” or valid for the rest of the kid’s entire life, and over time certain types of these policies will grow in value and that growth in value can be accessed without penalty for any reason. That money can be used for anything.
Once my relationship is finalized I’m getting this for my kids. But if you have questions about doing this for your kids email my team below and we’ll put you in touch with an expert who’ll answer your questions.