Viking Magazine - March 2016 - 11

of gr 73%
the intent of gifting
their grandchildren
annually, the
andchildren
say their
grandparents
influence
their savings
habits.
proceeds end when
the grandparent dies.
With a life insurance policy on the
grandparent, the gift actually magnifies
upon death, adds Carlson.
A life insurance policy, in addition to
providing a death benefit, provides cash
value that can be borrowed against.
For example, a grandparent may want
to help fund a grandchild's education.
When money is needed a loan against
the cash value can be made. However,
if the grandparent has died, the death
benefit will be available to fund their
education. Either way a legacy is being
provided for the grandchild.
If your health keeps you from
qualifying for a life insurance policy, an
annuity is another option with some of
the same tax perks. The money grows
tax deferred and can be earmarked
for education for grandchildren.
Willoughby advises older clients who
aren't in a position
to ride out losses
in the stock market
to consider fixed
annuities as a more
conservative investment that guarantees
the safety of your principal payment.
Annuities can also be passed on to a
beneficiary, but unlike a life insurance
policy, there is a taxable event on the
growth of the annuity.
As grandparents make these
decisions, Willoughby suggests they talk
about their plans and financial values
with their children and grandchildren.
Modeling good planning, saving, and
long-term investing can have a powerful
influence on the next generation. Not
all schools offer personal finance classes
anymore, notes Willoughby, so it falls
on families to pass on important
money lessons.
Sons of Norway offers life insurance and annuity
products in the United States only. Not all products
are available in all States.
1.
Find teachable moments in daily
activities. Heading to the store?
Take a moment to show kids how to
comparison-shop.
2.
Be an example. Share stories about
what it was like growing up and how
you saved for the things you wanted at
their age, or what you would have done
differently.
3.
4.
Make it fun! Find saving and
spending games for kids and teens
at themint.org.
Make a plan. Does your grandchild
want a new tablet? Help them make a
plan for how they can earn and save
the money.
For a complimentary consultation with
your Sons of Norway Financial Benefits
Counselor, visit sonsofnorway.com.
Tips for money mentoring
5.
6.
Financial Tips
« While grandparents may have
set aside money for their kids or
grandkids to use for their education
or as an inheritance, they often
don't realize the tax ramifications
of having money just sitting in a
bank account. When that money
designated as a legacy gift is put
into a life insurance policy, all of it
goes to the chosen family member
income tax free.
Start a savings account. Help kids
open an account and track the money
that goes and in out.
Utilize technology. Check out
interactive tools together for
budgeting and saving, such as
pearbudget.com.
« Anything you have as a liquid
asset - cash or a certificate of
deposit - that you plan to pass on
through your estate is subject to
Federal Estate Taxes. Also, money
in a bank account is likely earning
less than 1 percent in interest, while
the cash value of our universal life
insurance policies have interest rates
of 4.70 percent.
« If seniors have money that isn't
expected to be needed for their own
care, they can buy a single premium
life insurance policy. The beneficiary
will always receive more than the
premium payment. Also, the benefit
will be income tax free and avoid
probate. In addition, with a chronic
illness rider, the policyholder can
maintain the flexibility of tapping
into the cash value funds if there was
a need to cover nursing home or
long-term care expenses.
-John Willoughby, FBC
Helena, Mont.
sonsofnorway.com VIKING MARCH 2016 11
http://www.pearbudget.com http://www.themint.org http://www.sonsofnorway.com http://www.sonsofnorway.com
Viking Magazine - March 2016

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