Is a 529 Plan the Best College Savings Plan?

Where do you put your money?

You contribute after-tax money, so gets US off your back because the money growing from now on is all tax-free as long as it’s use for college expenses.

There is a contribution CAP of about $300k to $350k, depending on the state of the plan.

What if you child decide to not go to college and wants to be a rock star instead?

In that case, you can change the beneficiary of the 529 plan to a close relatives, such as you other children, grandchildren or even yourself or your spouse.

However, if no one is going to use that money for college education and you decide to withdraw the money, you’ll be hit with a 10% penalty PLUS income tax.

Besides, money in a 529 Plan is considered during financial aid application process as parents’ assets.

Let’s take a look at another very similar savings vehicle…the ROTH IRA.

The ROTH IRA is not just for retirement.

You contribute after-tax money, so gets US off your back because the money growing from now on is all tax-free as long as you withdraw your money after 59 1/2.

But Uncle Sam is very smart, he limits what kind of money you can contribute AND how much you can contribute each year.

Contribution must be earned  income, meaning from a JOB.

The current annual contribution limit of $5,500, an extra $1,000 for catch-up if you’re 50 years old.

10% penalty on withdrawal before 59 1/2 PLUS income tax except if you’re using the money for college expenses, down payment for first home, and medical expenses.

An of course, if you take the money out after you turn 59 1/2, you can use it whatever way you want.

Best of all, money in an retirement account is not considered when applying for financial aid.

However, there is a income limit for contribution as well. So if you make too much money, you cannot contribute to a ROTH IRA.

What if you want to contribute more than $5,500 a year and still take advantage of tax-free growth?

* QUICK FACTS: $5,500 a year for x40 years = $220,000. Is that enough for your retirement. Rule of thumb is you’ll need x20 times of your current income for a COMFORTABLE retirement.

Your next option is an indexed universal life insurance.

You contribute after-tax money, so it gets Uncle Sam off your back because the money growing from now on is all tax-free.

The money in the cash account can be used for anything, such as college tuition and expenses. If your child decides to not attend college, he or she can use the money as down payment for his/her first home or invest in a business, etc.

When my daughter earns her first paycheck at 16, I opened a ROTH IRA for her to get her started. Even though she does not make $5,500, but because I started her early, I put the full amount of her earned income, so she has more years to save. We all know $5,500 a year is not a lot. With the money in the ROTH IRA, we invest in low-fees index funds.

All her gift money from birthdays and holidays goes into her life insurance cash account making “money babies” safely at 10% annual return and tax-free.


How to Bullet Proof Your Family Fortune & Sanity?

Financial Check-up

You understand the importance of protecting your assets and belongings. You insure your homes, cars, computer, iPad, iPhone, etc. Are you really properly protected? Is your most valuable asset (YOU) protected?

What if you die too soon? Who’s going to continue to pay for your family’s mortgage? Your family’s living expenses? Your children’s college tuition? Will your spouse and children be able to support themselves without your income?

What if you become disabled or chronically ill? Where’s your income coming from? How will you pay for your care? Will your family have to quit their job to take care of you?

What if you live a long life? Will your retirement savings be enough to provide for you until you die? Will you still be able to take care of yourself? Will you still be able to work and earn an income? Will your medical expenses increase?

These are all the question that you want an answer to when the time comes.

Replaces your income and provides for your family after you pass,

Provides an endless stream of retirement income you can’t outlive,

Pays for your long-term care when you cannot take care of yourself anymore,

Pays for your medical expenses when you’re chronically or terminally ill.

Life Insurance is Like Real Estate

Do You Rent or Do You Own Your Life Insurance?

Deciding what life insurance to buy is like deciding whether to RENT or OWN your life insurance.

When you buy TERM life insurance, it’s just like RENTING. You get to live in the home for a fixed period of time. After that you either renew your rental lease agreement or you move on. All the money you pay each month for rent is all gone paying for your landlord’s mortgage and building his/her wealth.


When you buy permanent life insurance is like buying your own home.

When you BUY your home, you own your home for life AND you have equity.

When you buy PERMANENT life insurance, you own your policy for life AND you have cash value.

As the year goes by, your home EQUITY goes up in value. Same is true with your CASH VALUE in your life insurance policy. As the year goes by, your CASH VALUE goes up in value as well.

In time of need, you can borrow money against your HOME EQUITY for emergency, down payment for a second home, private school or college tuition, supplement retirement income, medical expenses, etc.

In time of need, you can borrow money against your CASH VALUE from your policy for emergency, down payment for your first home or a second home, private school or college tuition, supplement retirement income, medical expenses, etc.

Related article: Be Your Own Bank (B.Y.O.B.)

When you die, your family will inherit your home, equity and mortgage.

When you die, you family will receive the death benefit pay out PLUS cash value.

S.M.A.R.T. College Planning for a Debt Free Future

Are you concern about not able to provide for your child’s college education? Are you worry that you may have to take out home equity or personal loan to pay for your child’s college education? Are you worry that your child have to work during college to help pay for college tuition?

Cost of college is certainly a big concern nowadays. Most families do not have proper college planning. Most people focuses on saving for retirement and paying off debts, and only few plan for their children’s future.

College tuition, like everything else, has increased significantly over the years. In fact, cost of college goes up 6-7% every year. Currently in-state public school average $20,000 per year and private college average $40,000 – $60,000 for an undergraduate degree.

Did you know the average student takes 8 years to complete an undergraduate degree, which is usually a 4-year degree? That’s an additional 4 years of college tuition and 4 less years of potential earnings.

Most students change major about 3 times during their college years.


The son of a friend of a friend. I hope we had help this family with college planning. The son of a friend of my friend went to college and graduated from medical school with a medical doctor degree. After all the years and money spent acquiring the medical degree, the son decided he did not want to be a doctor.

You would never figure out what he became…

…a Catholic priest.

The parents did not know if they should feel blessed or angry with their son’s decision.


Because of the indecisiveness, many students graduate from college with enormous student loans.

Did you know the average student loan today is $37,172 for an undergraduate degree. Student with a professional degree can easily end up with a $150,000-$200,000 student loan after graduation.

And many college graduates end up in jobs that’s not even related to their course of study because they NEED a job to pay for their living expenses and start repaying their student loans.

That’s what happened to my friend’s daughter who graduated with a fancy but obscure science degree that she cannot find a job for, so she’s now working for some insurance company getting $10 an hour pay, the same pay as my teenager.

Do you want that for your son or daughter? Is that how you want your son or daughter to start their adult life?

In fact, student loans have now surpassed consumer debts in US.

Related article: Student Loan Debt In 2017: A $1.3 Trillion Crisis


  • minimize out-of-pocket expenses
  • maximize free money and resources
  • savings growth rate to at least beat inflation
  • maximize income tax benefits
  • graduate on-time with the right major
  • “hide my money and look poor”


What You Need to Know About Life Insurance?

What is Life Insurance?

Do you have insurance for your homes? cars? Apple watch? MacBook? iPhone?


How about your most valuable asset? YOU!

Today, people purchase all kinds of insurance to protect everything from their house, cars, phones and appliances. They even buy travel insurance for their vacation.

Life insurance plays an important part in your financial plan…It protects against income loss due to disability, chronic and critical illnesses and premature death.

Uncle Sam Pointing at You



Today, people purchase all kinds of insurance to protect everything from their house, cars, phones and appliances. They even buy travel insurance for their vacation.

Life insurance plays an important part in your financial plan…It protects against income loss due to disability, chronic and critical illnesses and premature death.




Which Life Insurance is Best for You?

That depends on your financial situation.

Related article: Best Life Insurance

How to Protect Your Home Mortgage with Life Insurance

Are you a homeowner? Are you still paying mortgage on your family home?

If so, I hope you have life insurance.


While homeowners insurance may protect you from theft and/or damage, but do you know what will happen to your home mortgage if something happens to you, the breadwinner?

Over the years, you've probably invested many hours and lots of hard-earned money to increase your property's value, creating a safe and comfortable home for your family.

But have you done everything you can to safeguard your family and investment?

Related article: Don’t Waste Your Money on Mortgage Life Insurance

A life insurance policy can replace your income in the event of untimely death, disability or illness, so your family can continue to afford the mortgage payment and continue to live in the home you have provided without financial devastation.

The living benefits from your life insurance policy can be used to pay for medical bills in case of critical or terminal illness. Some policies may even provide disability income or fund for long-term care.

All of these living benefits can help ease the burden of losing your income.

And in case of untimely death, your family will be provided for for the rest of their life with the death benefit. They can use the death benefit from your policy to replace your income, pay-off the remaining mortgage balance on your home and pay for any debts and/or expenses.

Related article: Pay Off Your Mortgage in 7 Years

Do you think your family would complain getting a $500,000 or $1,000,000 check when you leave this world?

How much and what kind of life insurance is suitable for you?

Well, that depends on where you are financially.

Or Do You Already Have a Life Insurance?

While you may already have a life insurance policy, does it provide enough coverage to replace your income when you are gone?

Without enough funds, your family may struggle to pay the mortgage and keep up with their current lifestyle, and may be forced to sell your home to make ends meet.

A life insurance needs analysis can help determine the appropriate amount of insurance coverage you need. If you don't currently own life insurance or haven't reviewed your policy in a while, a needs analysis can help you determine what's best for you and your loved ones.

Don't wait until it's too late...protect your family today.

Can You Afford Long Term Care?

Will you need long term care?

Most of you would answer “I don’t know”.

I don’t know either.

If I have a crystal ball that can tell the future, I would give you my honest answer.

Unfortunately, I don’t.

But my best advice for you is “be prepared when the need for long term care does arise in your future”.

Look at your elderly parents, uncles, aunties or grandparents at their current age. Do you think you’ll need long term care when you’re their age?

Long Term Care Need

Let’s see what options are available.

Medicare covers only a portion of long-term care costs up to 100 days; 20 days are provided at no cost and the remaining 80 are at a significant co-pay for the insured.

Long-term disability covers your lost income only, but doesn’t pay for any LTC needs. Oftentimes, when your job ends, so does your coverage.

Health insurance does not cover long-term care expenses. Medigap policies are health insurance and also do not cover LTC expenses.

Medicaid covers long-term care expenses for individuals with countable assets of $2,000 or less and care could be limited to a nursing home. You can no longer just transfer all your properties to your children to be qualified for Medicaid. They look at your assets in the past 5 years. If you sold a house in the last 5 years, they want you to spend down all that proceed until you’re poor enough to qualify.

If you don’t want to spend down all your asset to qualify for long term care…can you afford to pay out of pocket?

Is this a good option for you?

You can always pay for long term care out of pocket. But how deep is your pocket? Do you have the assets to pay for long-term care, and how long can that asset support your long-term care?

Rising Long Term Care Cost

Can your family members take care of you when you can’t take care of yourself?

Even the most responsible family may not be prepared physically, emotionally or financially to care for their loved one. 53% of Americans caring for a loved one lost income due to the demands of providing that care.

Hidden Cost of Long-Term Care

Long-term care insurance provides funding to cover home healthcare, assisted living, nursing home and even family member who takes care of you.

Long term care insurance premium are a lot more affordable than long term care. Besides, stand-alone long term care insurance policy, many life insurance policies offer long-term care insurance as a rider at very affordable rate.

So, can you afford NOT to have long term care insurance? Do you want to use up all your hard-earned asset on long-term care? Do you want to spouse or children to quit their job just so they can take care of you?

Tax-Free Retirement Plan

As a financial advisor, it is my duty to provide my clients with information and strategies on how to accumulate wealth so their money grow safely and be protected from market volatility while maximizing tax benefits.

Impact of Tax and Inflation

I just don’t like sharing my wealth with Uncle Sam, who’s not even my real uncle.

By maximizing your tax benefits, you’re also maximizing your savings. US debt is currently $19 trillion, do you think tax rate will be up or down when you retire. So do you want to pay tax now or later or never?


Brokerage account

Certificate of deposit

Checking account

Savings account





Traditional IRA


Health Savings Account

Life Insurance

Roth IRA

Roth TSP


Max out all tax-free retirement account to reap the biggest tax benefits.

There are many wealth-building vehicles with tax benefits that can be used for personal wealth accumulation, retirement planning, college savings, estate planning, etc. And there are a few that you should pay attention to because of their additional benefits.

The Four Cornerstone Characteristics of a Safe and Sound Investment

4 Cornerstones of Safe & Sound Investment

Let’s see how the common retirement accounts compared with the lesser-known indexed universal life insurance.


From the table you can see that both Roth IRA and Indexed Universal Life Insurance (IUL) offer great tax-free benefits, which is important when it comes to wealth accumulation.

If you have children planning to go to college, cash accumulation in both life insurance and retirement accounts are excluded as assets when calculating for financial needs.

The IUL insurance, by far, offers the most benefits. Seriously, it is life insurance on steroid. You have all the benefit of a traditional or Roth IRA but none of the restrictions.

You get to accumulate wealth in the cash account protected from loss (no market volatility to worry) with guaranteed growth earning a handsome rate of return up to 15%.

You can also access your money whenever you need during your lifetime tax-free as emergency fund, such as medical expenses, long-term care, vacation, invest in real estate, etc.

Related article: Be Your Own Bank

Not only that, your young family will be taken care of financially if you passes too early. The death benefit pays out to your family tax-free.

It is also the choice for many who has a large asset portfolio and makes too much income to invest in an individual retirement account IRA. An IUL provides excellent asset and wealth protection and there is no limit on your contribution, but certain guidelines do apply.

One drawback of the life insurance is that you need to have good health to qualify. Therefore, start early when you’re still young and healthy.

The Individual retirement account (IRA) is great investment vehicle for retirement savings because of tax benefits.

The Traditional IRA allows you to deduct your contribution on your tax return for the year you made the contribution, reducing your taxable income that year. However, you’ll pay income tax when you withdraw from the account because your contribution is pre-tax money.

Contribution to a Roth IRA, on the other hand, is after-tax money, so you cannot deduct your contribution on your tax return. On the bright side, your money grows tax-free until distribution.

However, there is no guaranteed risk-free growth with the IRAs. Your money is usually invested in stocks, mutual funds or bonds and is exposed to market volatility with no guaranteed growth and requires specialized knowledge in the stock market to make a profitable investment.

Related article: Invest in Real Estate with a Self-Directed IRA

With both IRAs, there is a 10% penalty on early withdrawal before the age of 59 1/2. There are exemptions to the 10% penalty. You can make an early withdrawal if you’re using the money to pay for college tuition, medical bills or down payment for your first home.

Even though you escape the 10% penalty, but the income tax still applies for withdrawal from the Traditional IRA.
There is also contribution limits to the IRAs: $5,500 a year or $6,500 a year if you’re 50 and older.

How do you want to save for your retirement?