Locator: 10010PERSONALINVESTING
Financial course for grandchildren.
Updates
December 10, 2024: the "60/40" conundrum.
November 24, 2024: online banking only? Won't allow large deposits. What to do? Link here.
October 7, 2024: Inter-generational wealth transfer. Liz Ann Sonders. A recurrent theme on the blog. Link here. Demographics. Wealth transfer.
- $84 trillion
- over next twenty years
- largest share, $30 trillion to Gen X
June 25, 2024: posted elsewhere this morning --
By the way, now that I've started my "intergenerational wealth transfer" program, I'm pretty much out of the market. My plan is on auto-pilot and I'm starting to move "grandparent" assets to "grandchildren" 30-year accounts. The "plan" is laid out below through several links. The specifics will change but the general plan is on auto-pilot.
May 29, 2024: the plan updated, mid-2024.
Family Plan For Intergenerational Transfer Of Wealth
This series has to do with gifting our inheritance to our family: timing, the process, thoughts. This has nothing to do with how family members manage their own family finances, if that makes sense. The family is going to receive a significant amount of money that they had not counted on at this point in their lives. The goal is to ensure their inheritance is managed as well as can be expected.
There are several reasons and several goals.
I would prefer the heirs receive their inheritance while they are still young enough to enjoy it.
Transferring it now in smaller tranches makes much more sense than one large tranche at the end.
Our heirs will learn about investing over time, when we’re still alive to provide our rationale for what we did.
As our income increases, all passive income, Federal income taxes increase at an even faster rate (it seems). Transferred money will be divided among nine (9) primary heirs all of whom are in a lower tax bracket than we. In addition, I expect that a significant amount going to the two daughters will be “parked” in tax-deferred retirement accounts. A huge focus of the grandchildren’s inheritance will be on tax-deferred (and likely tax-free) accounts but they will certainly have access to monthly cash flow generated by the portfolios. [Slight change from original plan. The previous plan suggested the grandchildren would not have any meaningful cash flow. Trust me: the grandchildren will do quite well short-term and long-term.
Goal: to have exhausted 99% of our inheritance before we die, leaving only fairly substantial IRAs to dispose of after our death.
Intergenerational transfer of wealth.
- the Roth IRA is a no-brainer; brain dead if you choose to go with a traditional IRA.
- thinking of converting a traditional IRA to a Roth IRA? Think again. Forbes, November 28, 2024.
529s.
Coverdell Education Savings Accounts (ESA).
RMDs.
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