talk about legitimate ways of sheltering money

[lookout123]

also you should consider any of the 'custodial fees', expense ratios, backend loads, etc. that may apply.

Those will most likely be the same regardless of account type as those are related to the investments themselves, not so much the type of accounts.

[barefoot serpent]

Originally Posted by lookout123

Those will most likely be the same regardless of account type as those are related to the investments themselves, not so much the type of accounts.

But aren't some fees waived for institutional investors (401Ks) vs. an individual account?

[lookout123]

not generally.

annual fees per account are charged regardless - more generous companies just pay it for their employees. Otherwise the standard is $40/year.

commissions/transaction costs - most 401k's are full of no load funds, so that would be the same. Other choices are A/B/C sh, each has pro's and cons.

[TheMercenary]

Originally Posted by lookout123

UTMA/UGMA accounts basically allow you to maintain control of the money until the child's 18th birthday. On that day you lose all control of the funds and cannot regain it. The child can choose to buy a hummer (of any variety) and there is nothing you can do about it. Also, although rare, there is precedent for the Custodian of the UGMA account being sued for not making prudent investments for the benefit of the child. Think about a vindictive now-exwife who doesn't think ex-hubbie should have bought XYZ stock.

In short UGMA's are not a "shelter" for money. they are a way of putting money aside for kids, usually for college. The growing popularity and additional control of 529 plans have seen the UGMA concept fall to the wayside for most people.

Well I have one for my dau, who is in college, and because I never signed over the account to her, and she does not know it is legally her's, I am still the custodian and she cannot get money out of it without my consent. She is 20 years old. I want to keep it that way. It was my money that was saved and earned over the last 18 years, and since it is a big chunk (30k) I want to be sure it is used for her when she is in school for things I think are worthy. When she graduates I will use the balance to pay down the school loans we took out for her to go to school. Our other kids have only 529's and oldest has one as well that we have not tapped yet. 529's have a more limited use defined but can be rolled over from one kid to the next if they are not used.

[TheMercenary]

Originally Posted by lookout123

What do you want to know?

Keep in mind that I don't know you, your financial situation, etc. And oh yeah, this a publically accessible thread so I have to be very careful about what I say.

Well then PM me. I need to shelter money. I am not eligible for Roth. I declined the company 401k because it sucked. I have a SEP-IRA retirement account and some non-deductable regular IRA's.

[lookout123]

It was my money that was saved and earned over the last 18 years, and since it is a big chunk (30k) I want to be sure it is used for her when she is in school for things I think are worthy.

It stopped being your money the moment you "gifted" it into the account. I'm sure your family situation is hunky dory so you don't have to worry about it, but right now you are in violation of the codes surrounding the account. It was her money from the date of deposit, control of the account is hers as of the date of her 18th birthday. Just because you haven't told her about the account doesn't change your requirement to adhere to the guidelines. Your advisor should have adressed the issue already. Just be aware that if she ever finds out it exists she can walk into the advisors office and order the liquidation and there isn't a thing you can do about it.

As far as the rest of the info, I won't give specific recommendations to someone I don't know well enough to take on as a client (liability and all that).

In general, I've seen very few 401K's that were so bad I wouldn't take advantage of them. At worst they'll have some target date funds available.

A SEP is a great start. It may be time to find out if that is all you can do. Are you structured so that a Owner only 401K will work? How about a max funded defined benefit plan? Are you of an appropriate age and tax bracket where a new breed variable annuity would make sense? (if you are literally trying to "shelter" money then this requires serious consideration). Are you best suited for an overfunded Life Insurance plan with tax free income stream? How about muni strips?

These are some ideas to look at, but if you really don't know then you should sit with an advisor/planner and see if they can come up with an improved plan.

[theotherguy]

Lookout - what is the best way to find an advisor/planner? I don't know how to evaluate one to make sure he/she knows what they are talking about.

[TheMercenary]

Originally Posted by lookout123

Just be aware that if she ever finds out it exists she can walk into the advisors office and order the liquidation and there isn't a thing you can do about it.

Not to worried about that.

As for the rest of the post, thanks. I will look into it. Right now I still havent maxed out my SEP, 35K a year, and I need to do that. The investments they are in with TRP have accrued over 25% since I started them. I will look into the other stuff.

[lookout123]

Originally Posted by theotherguy

Lookout - what is the best way to find an advisor/planner? I don't know how to evaluate one to make sure he/she knows what they are talking about.

a positive word of mouth referral is always the best way (i may be a bit partial though. I don't advertise, I work referral only.*)

The key is to figure out what service you actually need. Do you need someone who just has good ideas on what stocks/funds/bonds to buy? Do you need someone to help you with creating a basic plan and setting you up with an appropriate asset allocation? or Do you need comprehensive tax/estate/investment planning?

If you don't even know where to start PM me and I'll point you in the right direction.

*just so everyone is on the same page, I am not now, nor will I ever use the cellar as a place to troll for clients.