r2i forum

I think it is better to open a Roth IRA and fund that account every month. If you are not eligible for Roth, you can try backdoor roth IRA (Search in google)

Advantages:
-All the money you make is non taxable at your retirement
-after 3 years or so, you can take out the contributed amount portion without paying any penalties

Right now stable stocks like MSFT, GE, INTC are reasonably priced and offer around 3% dividends.

Also, you can open high yield savings account for regular money transactions. Paycheck goes there, and you can make online payments from this account. I use alliant credit union, they pay .8% interest (not lot), but get something for my staging and emergency funds.

Desi;440474

2. Insurance on a child should NEVER be purchased (this is my view - others may disagree).

In India, the scrupulous agents sell insurance plans to parents on kids name. The selling point is (1) insurance premium is lower (2) parents get tax benefit. But they miss the point.

Why would a kid need insurance ?

Would you buy a car insurance without a car ?

Why would any one need insurance if there are no dependents ?

I think if the child is an artist or genius of some kind and earn income and if parents are depending on that income, then insuring the kids life make sense.

I wonder Desi, why did you say others may disagree. Have you come across some one justifying insurance for kid ?

RRK;466101In India, the scrupulous agents sell insurance plans to parents on kids name. The selling point is (1) insurance premium is lower (2) parents get tax benefit. But they miss the point.

Why would a kid need insurance ?

Would you buy a car insurance without a car ?

Why would any one need insurance if there are no dependents ?

I think if the child is an artist or genius of some kind and earn income and if parents are depending on that income, then insuring the kids life make sense.

I wonder Desi, why did you say others may disagree. Have you come across some one justifying insurance for kid ?

RRK,

Exactly as you say that even scrupulous agents sell insurance for children because they miss the point. What they offer is other "selling points".

Thousands of insurance policies get sold for children. The agents who sell those, I am sure justify those. Here for example you will see some reasons being offered -
http://www.bankrate.com/brm/news/insurance/kids-life1.asp

http://www.mutualofomaha.com/life-insurance/learn/whole-life-insurance/childrens.php

Specifically, I have not come across in this forum, but I have seen a local friend of mine try to sell child insurance to another local friend of mine, here in USA (neither of the two are members of this forum).

I have come across similar advice in India.

That is - Insurance policies can be used as inter-generational tax free asset transfer. ( some kind of estate tax planning). You take an insurance policy in kids name and pay all premium. At the time of maturity, child encash all the money. Sounds cool right ?

I ask these advisers, what is the difference if you give this money as one check to your child ? It is also tax free.

Except that in later, the insurance agents don't get any commission.

Make it more complicated and mix some parent's emotions towards child, voila, you got a sale completed.