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Fund to hold onto forever
Old 03-06-2015, 08:23 AM   #1
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Fund to hold onto forever

I'm cashing in a JS VUIL that DW and I took out when the kids were small. The mortality cost was small and it has actually grown nicely. But now the kids are grown with education paid for and I don't want to pay for life insurance anymore. It has a surrender value of $220,000 and I've paid in $120,000 in premium so I'm preparing to pay about $20,000 in taxes on the gain and investing the rest with Vanguard. (The only advice I have on life insurance is buy a lot of term and invest the difference yourself, but that's a whole different topic than my question and I think I'd be preaching to the choir.)

Here's my real question. My intent for these funds is to hold onto it forever and leave it in our estate, just like we would have used the Life Insurance cash value and death benefit. We should have enough other income where we don't need to tap into it or ever sell a share. I'd like to put it in a growth fund that doesn't generate a lot of taxable dividends, and just let it grow. (Kind of like a Berkshire Hathaway concept) I know diversification is important, but so is simplicity. If I had to do it today I'd put the whole $200,000 into Vanguard S&P 500 index fund and forget about it.

Any other suggestions ? Thanks.
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Old 03-06-2015, 08:26 AM   #2
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VTI.
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Old 03-06-2015, 08:27 AM   #3
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50% VXUS
50% VTI

Or Equivalent ETFs from Schwab....which I think have tiny bit smaller fees.
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Old 03-06-2015, 08:41 AM   #4
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50% VXUS
50% VTI

Or Equivalent ETFs from Schwab....which I think have tiny bit smaller fees.
Cheater. One fund. I picked VTI so they can work their way up the Vanguard perk ladder.
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Old 03-06-2015, 08:51 AM   #5
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Or VT, Vanguard Total World. Is more expensive than buying two ETFs separately but is easier to hold just one and not to have to worry about rebalancing.
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Old 03-06-2015, 08:59 AM   #6
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Thanks for the options, I wouldn't mind two funds - although I don't plan on rebalancing or creating any taxable event. I like the idea of some international exposure, but don't plan on it holding any bonds. It will become a tax bomb for me but the kids will get a stepped up basis when it's theirs.
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Old 03-06-2015, 09:33 AM   #7
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Originally Posted by Del Q View Post
Thanks for the options, I wouldn't mind two funds - although I don't plan on rebalancing or creating any taxable event. I like the idea of some international exposure, but don't plan on it holding any bonds. It will become a tax bomb for me but the kids will get a stepped up basis when it's theirs.
Problem with international is you may lose out of the QDI tax treatment. You need to look into that first. Good luck.
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Old 03-06-2015, 10:23 AM   #8
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Thanks for the options, I wouldn't mind two funds - although I don't plan on rebalancing or creating any taxable event. I like the idea of some international exposure, but don't plan on it holding any bonds. It will become a tax bomb for me but the kids will get a stepped up basis when it's theirs.
I would not rebalance such purchase.
But this is what I would buy
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Old 03-07-2015, 10:10 AM   #9
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Pretty much what you mention:

Any S&P 500 tracker
Vanguard Total World (VT)
Vanguard VTI
Berkshire

Can also consider an accumulating fund (like IE00BFPM9N11 - note that that one is in EUR and based in Ireland, but something similar surely exists in the US).

If you are convinced in mid cap value VOE might also be useful. Or one of the Vanguard target retirement data funds.
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