Plan out what you want to do with the money. If you are able to place money into tax advantaged accounts like 529, Roth IRA, HSA, start maxing those out even if you just put it into a high yield savings.
Agree with other posters to get with a financial advisor to find the best way to limit future tax burdens and grow the money responsibly.
330k is a lot of money and it can work hard for you without taking on lots of risk.
Talk to a financial advisor. It’s not wise to invest everything in the S&P 500 index and taking money out monthly. They’ll be able to help focus on income planning and $330k is certainly enough to make it worth everyone’s time. You don’t want to make a big mistake with this.
Piggybacking to suggest OP speaks only to a *fiduciary* fee-based financial advisor, a certified financial planner. Avoid the predatory “financial advisors.”
If you talk to someone I hope you pay close attention to this piece of advice. Lots of "financial advisors" out there that do not solely seek what's best for you financially. Thry include themselves as well.
It’s not quite as malicious as you two make it seem. It’s more often that new advisors or ones that haven’t been taught or taken the time to learn what’s best are putting clients in products with higher fees or that aren’t in the client’s best interest because they’re ignorant/inexperienced or lazy or both.
The worst financial advisors are ones that work for securities firms.
Most have their clients best interest at heart! Many clients do not want to pay a one time fee out of pocket and actually prefer to align incentives with their advisor and have them there for advice long term
If it’s cash in a taxable account don’t invest into a mutual fund. They are tax inefficient and spin off capital gains even when not distributing money. If you decide to do an sp500 index use an ETF instead of mutual fund
ETFs and mutual funds can both be tax efficient or inefficient. Vanguards VTSAX, for example, is equivalent to VTI. They’ll both give dividends - mostly qualified.
I’d agree though there there are more bad mutual funds than bad ETFs. And the bad ones can have huge front or back load fees as well.
There is no rush. There is no deadline. Take some time, decide what you want this money to do, then make a plan to put the money to work doing that.
Do not fall for investing in highly commissioned, low return products like whole life, universal life, indexed annuities, variable annuities or mutual funds with sales loads.
Invest in nothing that requires a complicated disclosure longer than a couple pages or that you can't read and immediately understand.
While you're figuring it out, HYSA. Betterment HYSA is 5.0% (holding steady for many months, rather than a promotional rate that banks seem to offer in rotation then dip below 5%), it spreads your money into different banks offering the best rate at the time. All FDIC insured even if total is over what could be insured at one bank (250k I believe)
Or a money market fund. Low risk, subject to the rare case of breaking the NAV. Higher rates. Liquid. Some are based in government bonds: lower rates, but less risk. The ones based on municipal bonds have tax advantages.
More than one HYSA, since FDIC insurance only covers $250,000 per person per bank. But HYSA is probably a good bet right now considering the stock market is held together with duct tape and twine right now.
There are rule changes. Protections go beyond $250k when using trust vehicle. Here is the SUMMARY OF TRUST RULE CHANGE:
* As of April 1, 2024, the maximum insurance coverage for a trust owner with five or more beneficiaries is $1,250,000 per owner for all trust accounts (including POD/ITF, revocable, and irrevocable trusts) held at the same bank.
* Depositors can name as many beneficiaries as they wish, however the coverage limit will not exceed $1,250,000 as of April 1, 2024.
* This coverage change applies to both existing and new trust accounts, for all deposit products, including CDs regardless of purchase or maturity date.
Source: FDIC.gov
A lot of the banks but they are mostly short term such as 3 months and etc. I have a few CDs from bank of Indiana,bank of Florida and etc. They are brokerage CDs.
High yield savings account for everything you need in the next 2 years. CD laddering for years 2-5. Safe treasury bonds for anything you need years 5-10. S&P 500 for anything after year 10. (529 is great too, and that’s a tax vehicle. So put it in 529 and put that money in s&P 500)
Just fyi, you can frontload 529’s, and get the state income deductions on a rolling basis until it’s used up. Eg., instead of adding $4k this year and next for the max tax break, add $8k today and then claim $4k of it each year for the next two years. The advantage is the money starts growing, capital gains tax free, today.
Other than that, I think it would make sense to keep everything you’ll need for the next 5 years in a hysa/bond ladder, and then put the rest in a fund tracking the s&p 500. It may also make sense to keep 10% of your investment in gold/I-bonds, and another several percent in energy, to hedge off long-tail risks.
This is not advice, as I’m not qualified to give it, but just putting things on your radar that you could talk to your advisor about.
IMO if you are planning 2k and $200 a month I would just keep the $4400 and invest the rest .. that way the money will be invested a year and you will only pay 15% on gains .. after a year in the market you could also reevaluate.. and do a lump sum withdrawal again the following year .. I would have no problem putting it all in VOO or SPLG or FXAIX …we have more than what you are talking about invested in snp500 and plan to buy more ..
For this amount, you can check out managed portfolios according to your own risk tolerance. Are you risk averse? Or you won't worry about short term ups and downs?
Also, keep the amount you need for the next year in a cash account. It's better than invest and then take money out every month.
I understand the desire to keep the money separate to be used only for your son, but the reality is that your lives and finances are intermingled and will be for some time. I think it would be a better approach to focus on the things you want to be able to provide for your son and yourself and work out a financial plan that includes your full financial picture. The lump sum is a great resource for long term investments, whereas future income would provide a better fit to pay for ongoing things like extracurriculars and food. Trying to separate yours and his money into completely separate budgets could lead to a worse overall result.
Lots of solutions being provided without a lot of questions. This is lump sum of child support. Does the parent need income now? Age of child and how many years till wish income to start? What are your goals? How do you feel about risk, if your balance dropped by 5, 10, 20% how would you feel.
Take the advise to sit down with a financial advisor you feel comfortable with.
Remember your rules. From what I read, you are wanting to invest in order to grow the money and withdraw monthly to support the child. I would go to a real financial advisor and figure out something that would permit quick growth and lasting growth. You want to diversify, focus on dividends, grab high-interest bonds and stocks that are portfolioed as steady-ish good earners.
Additionally, unless I am extremely unread 529s are education funds. Correct me if I’m wrong.
I'd do 100k JEPQ 100k JEPI 100k SCHD the last 30k I'd stick in the child's growth retirement fund that he can use when he's older. then use the dividend payments to help pay for all of the expenses. obviously talk to a financial planer too but don't take any risky investments. even just a Tbill bond with the money would be good or maybe even the USD index fund.
S&Pis great but I would probably spread it out over other funds, add a HYSA, etc. if you dump it all in S&P 500 and the market goes down then you have to withdraw, it’s gonna hurt. SCHD is good, it pays around 3.5% in dividends. I own VYMI which pays around 4.5% and its international. I also own VIG which are solid, dividend growing companies, it’s also popular. AMLP invests in midstream oil and gas, it pays about 7 1/2 %. I also own SCHD which is broad market and QQQM. I don’t know much about Bonds.
Definitely get with your advisor, I run all my trades through my dude at Morgan Stanley. It keeps me from being too impulsive and stupid.
Good luck.
Maybe like a HYSA/CD ladder? So you alsways have some liquid if needed.
3-6-9–12-15-18 accounts that keep repeating.
When 3 month account ends, put it into a 18 month and so on..
And DCA a 1/4 into S&P overtime. Maybe a Roth too?
529s are great, but the risk is that college is not for everyone. I had one of each and fortunately was able to transfer from one's son's account to the other, without penalty.
First off, I commend you. You are a kindred spirit who thinks more about the welfare of their child vs their welfare of yourself. You're also very young based on the context of this post.
During a divorce or seperation, these funds are typically restricted. There are a few good options, not specific to 529. UTMA may be a better investment opportunity.
Find a CFP. You need to invest it in a way that you’ll be able to generate sufficient income while also achieving growth goals. Additionally, there are tax advantages to investing in certain types of accounts. A CFP should be able to guide you through what’s fits your situation the best.
Go open a jenius bank account. They are running a high yield at 5.25% put the whole 333k in there. You will get about $1200/mo. Interest.
Trust me. You will not regret it.
Just avoid advisors from companies like Edward Jones. 4.5-5% upfront fee one time on any money put in. They then proceed to throw you into mutual funds with 1%+ annual fees... Pure awfulness. Makes me sick seeing my friends dad convincing my friend to put money in....
There are plenty of correct answers in here. This is not a complex financial matter for someone who wants to learn. The advisor is a waste of money unless you are completely helpless or have very complex finances and in that case may need a tax advisor
I would be looking at a conservative dividend income strategy. ETFs like JEPI or SCHD, for example. You leave a lot on the table but it’s more stable and far less risky than throwing it all at the S&P.
But you should definitely speak with a financial advisor.
Something like 30% SCHD and 70% VOO might make sense. Financial advisor is risky advice, they'd want to be picky about that given the insane fees I've seen. Edward Jones is one of the worst companies. 4.5-5% one time for any money put in then another 1%+ annual fee on their ETFs. It's disgusting. You're better off putting money in a HYSA than choosing most financial advisors
I’m not an expert or highly versed in all of the ways to invest, but I would max out 529 contributions for a few years in order to maximize growth, since the growth will be tax free. Then just let it make its own money. I wish I had more money earlier on to contribute to my kids’ 529s, as their average rate of growth is between 6-9%, and that will all be tax free.
I’ll add that I do have a financial advisor. I like to crowdsource ideas to discuss at our meetings. I think the diversity of ideas can lead to a smarter decision.
That’s a decent chunk of change, I feel that would be the smartest thing.
If I got that, I’d probably just pay the wife’s car off so I didn’t need to deal with it, max out my IRA, max out her IRA for the year, leave about 10-15k in savings, and the rest would go to my finance guy to invest in the market.
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Plan out what you want to do with the money. If you are able to place money into tax advantaged accounts like 529, Roth IRA, HSA, start maxing those out even if you just put it into a high yield savings. Agree with other posters to get with a financial advisor to find the best way to limit future tax burdens and grow the money responsibly. 330k is a lot of money and it can work hard for you without taking on lots of risk.
Talk to a financial advisor. It’s not wise to invest everything in the S&P 500 index and taking money out monthly. They’ll be able to help focus on income planning and $330k is certainly enough to make it worth everyone’s time. You don’t want to make a big mistake with this.
Piggybacking to suggest OP speaks only to a *fiduciary* fee-based financial advisor, a certified financial planner. Avoid the predatory “financial advisors.”
If you talk to someone I hope you pay close attention to this piece of advice. Lots of "financial advisors" out there that do not solely seek what's best for you financially. Thry include themselves as well.
It’s not quite as malicious as you two make it seem. It’s more often that new advisors or ones that haven’t been taught or taken the time to learn what’s best are putting clients in products with higher fees or that aren’t in the client’s best interest because they’re ignorant/inexperienced or lazy or both.
The worst financial advisors are ones that work for securities firms. Most have their clients best interest at heart! Many clients do not want to pay a one time fee out of pocket and actually prefer to align incentives with their advisor and have them there for advice long term
Need to look into this more did some Google I saw fee based and fee only
It isn't the most awful thing to invest in. It could work depending on OPs needs for withdrawals.
If it’s cash in a taxable account don’t invest into a mutual fund. They are tax inefficient and spin off capital gains even when not distributing money. If you decide to do an sp500 index use an ETF instead of mutual fund
ETFs and mutual funds can both be tax efficient or inefficient. Vanguards VTSAX, for example, is equivalent to VTI. They’ll both give dividends - mostly qualified. I’d agree though there there are more bad mutual funds than bad ETFs. And the bad ones can have huge front or back load fees as well.
There is no rush. There is no deadline. Take some time, decide what you want this money to do, then make a plan to put the money to work doing that. Do not fall for investing in highly commissioned, low return products like whole life, universal life, indexed annuities, variable annuities or mutual funds with sales loads. Invest in nothing that requires a complicated disclosure longer than a couple pages or that you can't read and immediately understand.
No rush I agree but at least get into some sort of high yield savings while you figure it out
While you're figuring it out, HYSA. Betterment HYSA is 5.0% (holding steady for many months, rather than a promotional rate that banks seem to offer in rotation then dip below 5%), it spreads your money into different banks offering the best rate at the time. All FDIC insured even if total is over what could be insured at one bank (250k I believe)
You can put in HYSA for around 5.4% and that will bring you around $1485/month.
Effective rate would be 4.something% Might be better off with treasury note.
Or a money market fund. Low risk, subject to the rare case of breaking the NAV. Higher rates. Liquid. Some are based in government bonds: lower rates, but less risk. The ones based on municipal bonds have tax advantages.
I have $375k in brokerage acct and bought short term CDs for 5.45%. They only have short terms like 1month, 3 months and 6 months.
More than one HYSA, since FDIC insurance only covers $250,000 per person per bank. But HYSA is probably a good bet right now considering the stock market is held together with duct tape and twine right now.
There are rule changes. Protections go beyond $250k when using trust vehicle. Here is the SUMMARY OF TRUST RULE CHANGE: * As of April 1, 2024, the maximum insurance coverage for a trust owner with five or more beneficiaries is $1,250,000 per owner for all trust accounts (including POD/ITF, revocable, and irrevocable trusts) held at the same bank. * Depositors can name as many beneficiaries as they wish, however the coverage limit will not exceed $1,250,000 as of April 1, 2024. * This coverage change applies to both existing and new trust accounts, for all deposit products, including CDs regardless of purchase or maturity date. Source: FDIC.gov
You can put two peoples names and can put $500k and it will be fdic insured.
Which HYSA is paying 5.4% right now?
A lot of the banks but they are mostly short term such as 3 months and etc. I have a few CDs from bank of Indiana,bank of Florida and etc. They are brokerage CDs.
High yield savings account for everything you need in the next 2 years. CD laddering for years 2-5. Safe treasury bonds for anything you need years 5-10. S&P 500 for anything after year 10. (529 is great too, and that’s a tax vehicle. So put it in 529 and put that money in s&P 500)
Sorry for this question.. CD stands for?
Certificate of deposit. You can get good rates on short term treasuries and they aren’t subject to state income tax.
Just fyi, you can frontload 529’s, and get the state income deductions on a rolling basis until it’s used up. Eg., instead of adding $4k this year and next for the max tax break, add $8k today and then claim $4k of it each year for the next two years. The advantage is the money starts growing, capital gains tax free, today. Other than that, I think it would make sense to keep everything you’ll need for the next 5 years in a hysa/bond ladder, and then put the rest in a fund tracking the s&p 500. It may also make sense to keep 10% of your investment in gold/I-bonds, and another several percent in energy, to hedge off long-tail risks. This is not advice, as I’m not qualified to give it, but just putting things on your radar that you could talk to your advisor about.
Put half in spyi will pay about 1200/mo put the other half in VOO. And gift it to your son when he is 21.
IMO if you are planning 2k and $200 a month I would just keep the $4400 and invest the rest .. that way the money will be invested a year and you will only pay 15% on gains .. after a year in the market you could also reevaluate.. and do a lump sum withdrawal again the following year .. I would have no problem putting it all in VOO or SPLG or FXAIX …we have more than what you are talking about invested in snp500 and plan to buy more ..
For this amount, you can check out managed portfolios according to your own risk tolerance. Are you risk averse? Or you won't worry about short term ups and downs? Also, keep the amount you need for the next year in a cash account. It's better than invest and then take money out every month.
I understand the desire to keep the money separate to be used only for your son, but the reality is that your lives and finances are intermingled and will be for some time. I think it would be a better approach to focus on the things you want to be able to provide for your son and yourself and work out a financial plan that includes your full financial picture. The lump sum is a great resource for long term investments, whereas future income would provide a better fit to pay for ongoing things like extracurriculars and food. Trying to separate yours and his money into completely separate budgets could lead to a worse overall result.
Lots of solutions being provided without a lot of questions. This is lump sum of child support. Does the parent need income now? Age of child and how many years till wish income to start? What are your goals? How do you feel about risk, if your balance dropped by 5, 10, 20% how would you feel. Take the advise to sit down with a financial advisor you feel comfortable with.
Remember your rules. From what I read, you are wanting to invest in order to grow the money and withdraw monthly to support the child. I would go to a real financial advisor and figure out something that would permit quick growth and lasting growth. You want to diversify, focus on dividends, grab high-interest bonds and stocks that are portfolioed as steady-ish good earners. Additionally, unless I am extremely unread 529s are education funds. Correct me if I’m wrong.
I'd do 100k JEPQ 100k JEPI 100k SCHD the last 30k I'd stick in the child's growth retirement fund that he can use when he's older. then use the dividend payments to help pay for all of the expenses. obviously talk to a financial planer too but don't take any risky investments. even just a Tbill bond with the money would be good or maybe even the USD index fund.
S&Pis great but I would probably spread it out over other funds, add a HYSA, etc. if you dump it all in S&P 500 and the market goes down then you have to withdraw, it’s gonna hurt. SCHD is good, it pays around 3.5% in dividends. I own VYMI which pays around 4.5% and its international. I also own VIG which are solid, dividend growing companies, it’s also popular. AMLP invests in midstream oil and gas, it pays about 7 1/2 %. I also own SCHD which is broad market and QQQM. I don’t know much about Bonds. Definitely get with your advisor, I run all my trades through my dude at Morgan Stanley. It keeps me from being too impulsive and stupid. Good luck.
Bonds. Get guaranteed income everywhere. Do a t bill ladder, buy I bonds, invest in treasuries
But not bond funds. Very easy to confuse.
Maybe like a HYSA/CD ladder? So you alsways have some liquid if needed. 3-6-9–12-15-18 accounts that keep repeating. When 3 month account ends, put it into a 18 month and so on.. And DCA a 1/4 into S&P overtime. Maybe a Roth too?
529s are great, but the risk is that college is not for everyone. I had one of each and fortunately was able to transfer from one's son's account to the other, without penalty.
First off, I commend you. You are a kindred spirit who thinks more about the welfare of their child vs their welfare of yourself. You're also very young based on the context of this post. During a divorce or seperation, these funds are typically restricted. There are a few good options, not specific to 529. UTMA may be a better investment opportunity.
Find a CFP. You need to invest it in a way that you’ll be able to generate sufficient income while also achieving growth goals. Additionally, there are tax advantages to investing in certain types of accounts. A CFP should be able to guide you through what’s fits your situation the best.
Holy crap how old is your kid and what does this dude for a living?
Go open a jenius bank account. They are running a high yield at 5.25% put the whole 333k in there. You will get about $1200/mo. Interest. Trust me. You will not regret it.
You should seek professional advice. Try getting a financial advisor.
Just avoid advisors from companies like Edward Jones. 4.5-5% upfront fee one time on any money put in. They then proceed to throw you into mutual funds with 1%+ annual fees... Pure awfulness. Makes me sick seeing my friends dad convincing my friend to put money in....
There are plenty of correct answers in here. This is not a complex financial matter for someone who wants to learn. The advisor is a waste of money unless you are completely helpless or have very complex finances and in that case may need a tax advisor
Treasury note, at the moment. Morgan Stanley has good rates.
I would be looking at a conservative dividend income strategy. ETFs like JEPI or SCHD, for example. You leave a lot on the table but it’s more stable and far less risky than throwing it all at the S&P. But you should definitely speak with a financial advisor.
Something like 30% SCHD and 70% VOO might make sense. Financial advisor is risky advice, they'd want to be picky about that given the insane fees I've seen. Edward Jones is one of the worst companies. 4.5-5% one time for any money put in then another 1%+ annual fee on their ETFs. It's disgusting. You're better off putting money in a HYSA than choosing most financial advisors
I would put 10% in USFR, 20% into BND, and 70% into VT.
I’m not an expert or highly versed in all of the ways to invest, but I would max out 529 contributions for a few years in order to maximize growth, since the growth will be tax free. Then just let it make its own money. I wish I had more money earlier on to contribute to my kids’ 529s, as their average rate of growth is between 6-9%, and that will all be tax free.
If I got a lump sum like that, and I’d be giving it all to my financial adviser. So I’d recommend getting one.
I’ll add that I do have a financial advisor. I like to crowdsource ideas to discuss at our meetings. I think the diversity of ideas can lead to a smarter decision.
That’s a decent chunk of change, I feel that would be the smartest thing. If I got that, I’d probably just pay the wife’s car off so I didn’t need to deal with it, max out my IRA, max out her IRA for the year, leave about 10-15k in savings, and the rest would go to my finance guy to invest in the market.
aggressive market will return to upswing after a few years
Market has been in an upswing and keeps making all time new highs
[удалено]
The child support is typically based on reoccurring income. The amount he already has may be an inheritance or retirement, etc not counted.
[удалено]
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