Debt Dumpers - 2018

[ruadisneyfan2]

This is a very important consideration I forgot to mention, I'm glad you brought it up! I've always been told that the work life insurance policy should be your (not to be cruel) "hit by a bus" policy. If you die suddenly without warning, it is a good benefit for your family- but is not great if you die from a prolonged illness. Another good thing about an independent life insurance policy is that some may pay out in advance of your death if you have a terminal illness. My policy will allow me to draw from it if I have terminal illness in order to help cover expenses. While your family might not receive much after you die that way, at least you can pay some of the bills prior to your passing.

Bleak stuff, but it is important. In addition, I would encourage everyone to invest in a long-term disability policy if you have one available through work. My FIL nearly died of a heart attack a year and a half ago and had no warning signs or high-risk indicators. He is now permanently disabled. Unfortunately, he was self-employed and did not invest in a disability policy for himself.

He should still qualify for SSI? No? Not that it's the same as earning a salary.
My employer does offer free short and long term disablility with option to buy extra. I also sign up every year for their optional Accidental Death & Dismemberment. It's only like $5 per biweekly pay for their $300k pp family plan. This is in addition to the regular life ins. policy. If dh and I die in plane or car crash, at least it will soften the blow.

 

[DLgal]

Chiming in on the life insurance question.

The short answer is, if you have children, life insurance is ESSENTIAL, and you should take as much out on each of you, for the longest possible term, as you are able. Do NOT get "whole life" insurance. It's just about the worst "investment" there is.

Get a Term Policy. Get it for 30 years (or 35, if you go through AIG, which is the only insurer that offers 35 year terms).

Max it out. Underwriters will insure you for a maximum of (Annual Gross Salary x 25). This is how much you should have. It allows for your family to be taken care of in the event that one or both parents pass. It allows for enough money to settle debts, pay off houses, and invest the money and live off the interest income.

Get the policy NOW, do not even wait one more year. Rates climb astronomically every year you get older.

Here's our story:

We took our 20 year term policies at the age of 27. At the time, our kids were 3 and 1. My policy was for $500,000 (I am a stay at home mom) and my husband's was for $1.1 million. Mine costs $19/month, DH $42/month (he is military so he is higher risk).

It's been 10 years. Since then, both our boys were diagnosed autistic. What this means overall is, we will need to continue supporting them WELL into adulthood and at this point, it's about 50/50 whether they will ever be fully independent. We are 39 now. I freaked out realizing that in only 10 more years, our insurance was going to expire. I also realized we were VERY underinsured. DH's salary has doubled in 10 years and if something happens to me, $500k won't go very far.

We took out NEW 30 year term policies last fall to supplement our original policies. The agent I worked with confirmed that our current insurance levels were way too low, and we needed the new policies to make up the difference. So, we got an additional $1.5million on DH and $1 million on me. Costs: $89/month for mine, $135 for DH. Luckily, we got in while we were both still 39 years old. The agent told me if we had waited until we turned 40, our rates would be DOUBLE those! Yikes!

I am comfortable now with the amount we have going forward. 30 more years will take us to age 69, and at that point, we should have a very nice nest egg to pass to our (adult) children when we pass.

LIfe insurance should be a non negotiable monthly expense. It is as essential as utility bills and housing, IMO. In the end, it's a small price to pay. We pay about $300/month total now, and I consider it "$10 a day for peace of mind."

 

[Eureka]

We each get life insurance for free through work. Because of my age, I think mine is twice or three times my salary. I forget what Dh gets but it’s enough that I’d be able to pay off the house and then some.

 

[Tygerlilly]

Chiming in on the life insurance question.

The short answer is, if you have children, life insurance is ESSENTIAL, and you should take as much out on each of you, for the longest possible term, as you are able. Do NOT get "whole life" insurance. It's just about the worst "investment" there is.

Get a Term Policy. Get it for 30 years (or 35, if you go through AIG, which is the only insurer that offers 35 year terms).

Max it out. Underwriters will insure you for a maximum of (Annual Gross Salary x 25). This is how much you should have. It allows for your family to be taken care of in the event that one or both parents pass. It allows for enough money to settle debts, pay off houses, and invest the money and live off the interest income.

Get the policy NOW, do not even wait one more year. Rates climb astronomically every year you get older.

Here's our story:

We took our 20 year term policies at the age of 27. At the time, our kids were 3 and 1. My policy was for $500,000 (I am a stay at home mom) and my husband's was for $1.1 million. Mine costs $19/month, DH $42/month (he is military so he is higher risk).

It's been 10 years. Since then, both our boys were diagnosed autistic. What this means overall is, we will need to continue supporting them WELL into adulthood and at this point, it's about 50/50 whether they will ever be fully independent. We are 39 now. I freaked out realizing that in only 10 more years, our insurance was going to expire. I also realized we were VERY underinsured. DH's salary has doubled in 10 years and if something happens to me, $500k won't go very far.

We took out NEW 30 year term policies last fall to supplement our original policies. The agent I worked with confirmed that our current insurance levels were way too low, and we needed the new policies to make up the difference. So, we got an additional $1.5million on DH and $1 million on me. Costs: $89/month for mine, $135 for DH. Luckily, we got in while we were both still 39 years old. The agent told me if we had waited until we turned 40, our rates would be DOUBLE those! Yikes!

I am comfortable now with the amount we have going forward. 30 more years will take us to age 69, and at that point, we should have a very nice nest egg to pass to our (adult) children when we pass.

LIfe insurance should be a non negotiable monthly expense. It is as essential as utility bills and housing, IMO. In the end, it's a small price to pay. We pay about $300/month total now, and I consider it "$10 a day for peace of mind."

So, it's possible to have multiple policies? We both have our work ones, I'm going to look into getting us each one in the next month when I can afford the payments, but I'd like to take out an extra one in a few more years as well.

I swear this is the crap they should teach you in school...

 

[Eureka]

I swear this is the crap they should teach you in school...

Some places they do...my county has a financial literacy class that's a graduation requirement. DS17 is taking it now (says it's very boring and easy) and they are learning about mortgages, credit cards, loans, etc. I'm sure insurance will be in there someplace.

 

[DLgal]

So, it's possible to have multiple policies? We both have our work ones, I'm going to look into getting us each one in the next month when I can afford the payments, but I'd like to take out an extra one in a few more years as well.

I swear this is the crap they should teach you in school...

Absolutely possible to have several life insurance policies. What really matters to the underwriters is that your "total insured value" not exceed (your annual salary x 25). You can have any number of policies that add up to that amount. My husband actually has 4 active policies right now: the 20 year term, the 30 year term, SGLI (active duty military life insurance) and another policy through Navy Mutual Aid that covers him while active duty. I have three on me: the 20 year term, the 30 year term, and Spouse SGLI (will cover me while DH is still active duty).

 

[Tygerlilly]

Some places they do...my county has a financial literacy class that's a graduation requirement. DS17 is taking it now (says it's very boring and easy) and they are learning about mortgages, credit cards, loans, etc. I'm sure insurance will be in there someplace.

I wish we had it when I was in school. I never learned any of that and my parents are not role models for good financial advice. I'm honestly terrified of the amount of stuff I'm going to have to deal with when they pass. They're huge "put it on the card" people, even when my dad makes 6 figures. I promised myself I'd never allow myself to get that bad, which is why I'm here now. I noticed we were doing to many lease to own or personal loans.

 

[DisneyMandC]

He should still qualify for SSI? No? Not that it's the same as earning a salary.

He does, thankfully. It was a year before he could apply for disability though. I think the private options would kick in much faster. Fortunately he was approved on the first application for disability. I think perhaps now, eighteen months out, he is eligible to apply for Medicare and get off of Obamacare.

 

[Ngwira]

Congrats to all those who are getting back refunds! I finally have all of our documents but will likely file when we return from vacation. Our washer is now out of commission, but our toilet is fixed. Luckily, washer is covered by protection plan so I will schedule service upon our return. Our vacation budget is looking healthy as I have about $900 in cash for our trip ( for tips, souvenirs) aside from the points I plan to earn on my CSR for food (will be paid off in full once we return). I'm looking forward to our trip since it's a mix of flash (VEGAS!) and nature (Antelope Canyon, Horseshoe Bend, Zion National Park). Work has been nuts so this is a welcome reprieve. Glad to see everyone chugging along....

 

[Alexle2007]

He should still qualify for SSI? No? Not that it's the same as earning a salary.

He does, thankfully. It was a year before he could apply for disability though. I think the private options would kick in much faster. Fortunately he was approved on the first application for disability. I think perhaps now, eighteen months out, he is eligible to apply for Medicare and get off of Obamacare.

Disability (SSDI) and SSI are actually two very different programs administered by Social Security (which happens to be my employer.) SSDI is entitlement program with its own trust fund of which the individual has paid taxes into. SSI is supplement program for the disabled with limited income and resources. There is a 24 month waiting period for Medicare. You will receive Medicare benefits twenty four months from the month you were first eligible to receive your monthly disability benefit, not the date you became disabled and unable work. He don’t need to sign up but will automatically get Part A and Part B. He’ll get his red, white, and blue Medicare card in the mail 3 months before his 25th month of disability. I am actually working with CMS, who runs the Medicare program, on removing the SSN from the Medicare card using a new Medicare number beginning in April 2018.

 

[Alexle2007]

Please don't forget to include any 401ks or similar assets into your life insurance plans. DH and I have a substantial amount between us that DS will be multi millionaire just with our retirement funds.

 

[jackers]

We had a good January. Got my taxes filed this week and we are getting a sizeable amount back – more than I was expecting actually. So, we are going to split it between travel fund savings, extra car payment, and enhancing our home “gym.” We have a treadmill and a handful of hand weights. I want to get more free weights and a weight bench.

I also just checked out my paystub and the tax changes have gone through on our checks already. I am pleasantly surprised to be getting $150 more in my check due to a reduced federal tax. That will make such a difference, especially when my decreased pay goes into effect in April.

February will be a little more expensive for me. I have a trip in a couple of weeks to see DS1. He is in the Marines and has been deployed but is coming back to the states this month! I am travelling down with my DIL, grandson, and parents for his homecoming – we haven’t seen him since July and he’s only physically been with his wife and son for about 2 weeks in the last 9 months so I am so excited for him to be able to see his family for a few days. He only has 5 more months and will be done with his service (assuming nothing catastrophic politically happens in that time frame) and I can’t wait until he is home for good.

Anyway, year to date progress towards 2018 goals:

Car Loan: $900 towards a $12,000 goal

Savings: $1,200 towards a $5,000 goal

Mortgage Overpay: $200 towards a $4,000 goal

DS2 College Fund: $500 towards a $5,000 goal

Personal goal: 7 pounds lost (35 total goal)

 

[Dentam]

Turns out I'll only be getting $80 more per month with the tax change instead of $110 like I thought. Oh well, any increase in take home pay is helpful right now.

Car is completely dead right now in my garage. If I can't get it fixed this weekend I may just call the pet shelter to donate it to them. They will come haul it away. Might be shopping for another vehicle this weekend. We'll see. Just had a new battery put in my now dead car, so I'm hoping to get it running again. sigh.

 

[jen7233]

Turns out I'll only be getting $80 more per month with the tax change instead of $110 like I thought. Oh well, any increase in take home pay is helpful right now.

Car is completely dead right now in my garage. If I can't get it fixed this weekend I may just call the pet shelter to donate it to them. They will come haul it away. Might be shopping for another vehicle this weekend. We'll see. Just had a new battery put in my now dead car, so I'm hoping to get it running again. sigh.

I see a couple posts referencing the tax change implications on pay. Did you notice it for your first check in January or a second check? I'm just curious, I don't notice a difference in mine. My first check in January was half December/half January, so I couldn't tell, and then the next after that was for the first full January pay period and I only noticed my $20 raise. Maybe next paycheck I'll see if the new tax laws will have any change in my net take home pay. I'll post if I see a pay difference due to the tax laws.

Sorry about that car hope it's just a battery!

 

[Dentam]

I see a couple posts referencing the tax change implications on pay. Did you notice it for your first check in January or a second check? I'm just curious, I don't notice a difference in mine. My first check in January was half December/half January, so I couldn't tell, and then the next after that was for the first full January pay period and I only noticed my $20 raise. Maybe next paycheck I'll see if the new tax laws will have any change in my net take home pay. I'll post if I see a pay difference due to the tax laws.

Sorry about that car hope it's just a battery!

Ours is in the check we get tomorrow, which is already viewable online. I think companies have until mid-February to implement the changes.

The battery is brand new, so though I originally thought that was the issue, it's not. Next thing to try is the crankshaft position sensor, just having a hard time locating the old one to swap it out.

 

[DisneyMandC]

Disability (SSDI) and SSI are actually two very different programs administered by Social Security (which happens to be my employer.) SSDI is entitlement program with its own trust fund of which the individual has paid taxes into. SSI is supplement program for the disabled with limited income and resources. There is a 24 month waiting period for Medicare. You will receive Medicare benefits twenty four months from the month you were first eligible to receive your monthly disability benefit, not the date you became disabled and unable work. He don’t need to sign up but will automatically get Part A and Part B. He’ll get his red, white, and blue Medicare card in the mail 3 months before his 25th month of disability. I am actually working with CMS, who runs the Medicare program, on removing the SSN from the Medicare card using a new Medicare number beginning in April 2018.

Thank you!! It's been a while since my MIL told me all the details, so I probably got fuzzy on some things. We were extremely thankful that he got approved on the first try and that he can get on Medicare. Given the catastrophic nature of what happened (in the hospital for 7 weeks), he deserved to qualify for it, but you never know. Fortunately his cost for Obamacare dropped this year with his lowered income, so it's not as much of a burden now.

Turns out I'll only be getting $80 more per month with the tax change instead of $110 like I thought. Oh well, any increase in take home pay is helpful right now.

Car is completely dead right now in my garage. If I can't get it fixed this weekend I may just call the pet shelter to donate it to them. They will come haul it away. Might be shopping for another vehicle this weekend. We'll see. Just had a new battery put in my now dead car, so I'm hoping to get it running again. sigh.

Sorry about your car. Is it cold in your area? Have you checked your spark plugs? I had something similar happen with my last car where I thought it was the battery but it turned out it was my spark plugs. My mechanic told me that problem can sometimes surface when it's cold and it won't start in the morning, but sometimes after it warms up it will start. Just a thought. Though if you're having a lot of problems with it then I understand your desire to get another vehicle.

I am getting an extra $25 in my paycheck now. I went online when I saw that and immediately changed my Roth withholdings from $20 per paycheck to $40 per paycheck, so I'm just going to act like the money isn't even coming to me. I did change my federal tax withholdings from 1 to 0 the other week in a panic over thinking I owed taxes, but I'm not sure that has updated on this week's paycheck (hard to tell with the new pay updating as well). I honestly may just keep it at 0 since I'm concerned about how this tax plan will affect me next year when it's time to file taxes. It seems like reports are all over the place of what it will do- more pay in your check now but maybe less in a refund next year if you count on that? I don't know. I don't like giving the government an interest-free loan, but I might just let it stay like this for the year and then readdress it next year.

 

[Dentam]

Sorry about your car. Is it cold in your area? Have you checked your spark plugs? I had something similar happen with my last car where I thought it was the battery but it turned out it was my spark plugs. My mechanic told me that problem can sometimes surface when it's cold and it won't start in the morning, but sometimes after it warms up it will start. Just a thought. Though if you're having a lot of problems with it then I understand your desire to get another vehicle.

Actually I've had the most luck starting it first thing in the morning, then it tends to die once I've been driving it awhile and stop somewhere. Thought I was going to have to have it towed yesterday but it started one more time for me so I got it home and into my garage, up on ramps. It wouldn't restart at all yesterday and I tried multiple times throughout the day.The engine code it gave last weekend when I had the battery replaced showed the crankshaft position sensor was bad. They wanted $125 to fix it then and it would take a couple hours since they needed to get the part. I ended up buying the sensor for $15, but now I'm thinking I should have just had them do it since it's not easy to find... have to crawl under my car... fun, fun. Getting ready to walk to work now (definitely feel lucky to live close to work) and it's below freezing out.

ETA: I've been walking to work all week, but needed to run to the bank yesterday morning and hoped my car would have one more trip in her before I worked on repairs this weekend. Almost had to call a tow truck to the bank parking lot when it wouldn't start after trying for about half an hour. Decided to give it one final try and it started and got me home.

 

[Eureka]

My 1/31 paycheck was different from my 1/15 check, so I think that must be the tax change.

 

[DisneyMandC]

Actually I've had the most luck starting it first thing in the morning, then it tends to die once I've been driving it awhile and stop somewhere. Thought I was going to have to have it towed yesterday but it started one more time for me so I got it home and into my garage, up on ramps. It wouldn't restart at all yesterday and I tried multiple times throughout the day.The engine code it gave last weekend when I had the battery replaced showed the crankshaft position sensor was bad. They wanted $125 to fix it then and it would take a couple hours since they needed to get the part. I ended up buying the sensor for $15, but now I'm thinking I should have just had them do it since it's not easy to find... have to crawl under my car... fun, fun. Getting ready to walk to work now (definitely feel lucky to live close to work) and it's below freezing out.

No fun! We finally have a nice day here (upper 50s) but it's going to be miserable this weekend. I'm ready for the weather to break!

 

[DLgal]

Please don't forget to include any 401ks or similar assets into your life insurance plans. DH and I have a substantial amount between us that DS will be multi millionaire just with our retirement funds.

This is true to an extent. These types of assets can be passed on but may not be tax free. As far as I know, they are only tax free if they're rolled into existing retirement accounts. Life Insurance provides tax free liquid cash that can be used immediately as necessary, or invested for the future. Someone will pay tax on investment accounts, either the estate or the beneficiary, if the money is cashed out at the time of death.