Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-23-2020, 10:59 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,218
We always paid for medical insurance until our kids had full-time jobs with coverage. Even when one took time off from college and had a contract job, we paid for the health insurance policy for our peace of mind. It was put to good use one year with one hospitalization where we maxed out the deductible pretty quickly, I mean that policy might literally have saved one of our kids' lives. I don't know what kind of care / hospital debt he would have had without insurance, but I'm glad we didn't have to find out.

In college we paid for most of their expenses not covered by financial aid except they had to work for spending money, and some summer expenses when they weren't in school full-time.

We plan to help our kids buy houses eventually. Our kids are pretty frugal. They have no debt, no student loans, are saving for retirement, have used cars, bake their own bread, grow some of their own food, have always lived either in studio apartments or with roommates, etc. They both are in careers they enjoy and work full-time with benefits now. I can see not providing EOC for luxury items like country club dues, but helping with housing in a very expensive housing area when we have the funds to help them live in a nice safe area, yeah, we're going to do that. I mean maybe if we lived where houses were $200K they might not need it, but in coastal California they could probably use some help.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-23-2020, 11:03 AM   #22
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,409
Quote:
Originally Posted by Sojourner View Post
Yes, it's a form of EOC, but not the worst kind. Are you sure, however, she's actually putting all the money you're giving her into her savings (preferably, a 401(k) or IRA), where she can't touch it until retirement? I'm guessing you don't want her to be able to easily dip into these "gift" savings whenever she feels any sort of financial pinch or, worse yet, feels an urge to spend/live above her means.
Yes, she no longer qualifies for the "IRS free file" program since we started doing this, so I offered to do her tax returns with my copy of TTax, which means I can see how much goes into her 401k. I wouldn't know if she borrowed from the 401k or took money out of her Roth IRA, but she's never given us any reason not to trust her with money. She's pretty frugal and has been good at saving in the past.
cathy63 is offline   Reply With Quote
Old 07-23-2020, 11:11 AM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 6,923
Quote:
Originally Posted by SecondCor521 View Post
I'm not cathy63, but it's legit.

If the parents individually give more than the annual gift limit, then the parents would either have to (a) file a gift tax form (706? 709?) with the IRS and apply the excess to their unified lifetime exclusion of $11.58M per person, or (b) pay a gift tax.

The recipient gets the owner's cost basis and holding period, I believe.

I agree that it's probably a form of EOC, but this hits on how to handle the situation where the parents have excess money that will go to the kids now or later. How to give now without it becoming EOC is something I'll have to think about.
Got it just wondering what would happen if you gifted to minors. ie grandkids would they pay tax at the parents rates?

I'm not picking your brain a short yes or not would be fine TIA...
ivinsfan is offline   Reply With Quote
Old 07-23-2020, 11:29 AM   #24
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,409
Quote:
Originally Posted by ivinsfan View Post
Got it just wondering what would happen if you gifted to minors. ie grandkids would they pay tax at the parents rates?

I'm not picking your brain a short yes or not would be fine TIA...
Dependents are subject to "kiddie tax", so it's not a simple yes/no. If the stock sale is their only income, then I think the first $2K of the LT gain would be taxed at 0% and the remainder at their parents' rate, but you also have to consider if they have any income from jobs or other savings.
cathy63 is offline   Reply With Quote
Old 07-23-2020, 11:42 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Teacher Terry's Avatar
 
Join Date: Jun 2014
Posts: 5,281
I think paying for HI is a must.
Teacher Terry is offline   Reply With Quote
Old 07-23-2020, 11:11 PM   #26
Recycles dryer sheets
 
Join Date: Mar 2014
Posts: 191
Quote:
Originally Posted by SecondCor521 View Post
Hi all.

I have three children: DS25, DS20, and DD18. All three have graduated from high school and are in the process of obtaining marketable college degrees.

They all have different money personalities, and they all are in the process of becoming self-sufficient in various ways and at various speeds.

I want to avoid EOC (economic outpatient care), probably for all the reasons outlined in the book (which I read a long time ago). I have a goal for all of my kids for them to be completely self-sufficient at some point.


I'm really interested in both (A) the broader question of EOC, and (B) how to treat college medical expenses in the context of EOC.
Personally, we supported our kids through college, including medical. We have the financial resources to do so and our kids are basically good kids, so I wouldn't have considered doing anything else. Especially since keeping them on our medical until didn't cost us anything.

I share your concern in terms of EOC, but I do not believe helping kids in college the same as when they are starting their lives.

Now, mine are 28, 25 and 23. All living on their own. We still pay their phones (kind of just the status quo.....we'll be changing that eventually, but we're not highly motivated right now to decide a new plan, so we keep putting it off).

I agree with the poster who noted that EOC is when your kids depend on the money or resources you provide to maintain their lifestyle. We "help" our kids out at times. We cosigned both our oldest kids first apartments. We pay for an annual family reunion weekend for dh's family (his siblings and their families), because we want them to stay connected to family and it's a priority for us. If we take them out for dinner, we pay. We dog sit our "grandpuppy" a couple of days a week, because he's adorable and gets along well with our dog. Our sons roommate and roommates girlfriend don't have family in town, so we invite them to join us for family events and meals at times and pay for them as well.

Our dd has a pension and puts 15% of her remaining salary into a 403B. Our youngest just started his first software job and maxes out his 401K. Our oldest makes half of what his siblings do and can't contribute to a 401K until he's been with his new company a year, so we match what he puts in his IRA, because it's hard for him to max it out.

I don't know what will happen in terms of them buying a house (we're not there yet) but we would like to gift them some money to help with a down payment. We also have a wedding fund for all three.

I'm a firm believer in fair doesn't mean equal....we help out our three kids in different ways, based on their individual circumstances. I also believe you can help your kids with some things without it impacting their ability to live within their means and make responsible decisions. It really depends on your kids and who they are. And kids can change. Our daughter (25, almost 26) was not nearly as responsible two years ago as she is now. So that has changed how we might help her out. I despaired of my youngest finding a job.....he did poorly in college and seemed to be struggling after college. But 14 months later he has a good job, an apartment and has really gotten his act together.
PandaBear is offline   Reply With Quote
Old 07-24-2020, 08:22 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 6,923
PandaBear, great post and sometimes kids need a little time and helping them out for a little time lets them figure things out.

OTOH some kids get stuck and you might end fronting the bills for years waiting for the lightbulb moment. At some point you have ready to turn off the money if you realize it isn't helping them mature. Speaking for an extended family parent, for those you not in this position stopping the EOC can be harder then you imagine.
ivinsfan is offline   Reply With Quote
Old 07-24-2020, 09:21 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 11,274
I feel health insurance while attending College is part of the College cost, even if not explicitly required by the College.

However, I will point out, going bankrupt during College or right after is the best time to go bankrupt. Having a "child" go bankrupt when they are age 50 would be a more catastrophic event for their success, as they would probably loose more $$.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 07-24-2020, 12:57 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 6,923
Quote:
Originally Posted by Sunset View Post
I feel health insurance while attending College is part of the College cost, even if not explicitly required by the College.

However, I will point out, going bankrupt during College or right after is the best time to go bankrupt. Having a "child" go bankrupt when they are age 50 would be a more catastrophic event for their success, as they would probably loose more $$.
In college it's not about the kid going bankrupt it's about you going bankrupt if they have a medical issue. You could roll the dice on them getting the best treatment as an uninsured person, I wouldn't be comfortable with it.
ivinsfan is offline   Reply With Quote
Old 07-24-2020, 01:27 PM   #30
Thinks s/he gets paid by the post
 
Join Date: Apr 2015
Posts: 2,313
I think this situation will be different for each family, and possibly each child within the family.
We offer help/assistance/pay for various things for our two kids, based on their needs and asks. (they don't ask very much, or very often)
We feel blessed to be able to do this, and helping them now, to me, is better than waiting for their inheritance after we are gone.
__________________
You are no longer in a savings mode.
You are now in a slow spend down mode.
pacergal is offline   Reply With Quote
Old 07-24-2020, 01:55 PM   #31
Recycles dryer sheets
KarlH's Avatar
 
Join Date: Jul 2020
Location: Northern Illinois
Posts: 107
I have been thinking about this thread and I think the key is whether you are helping your kids afford a lifestyle they couldn't otherwise have. EOC can put your DD or DS behind the wheel of a 3 Series BMW, when they really have a budget for a Focus, or puts them in the 500K home when they have a 250K budget. The big negative of the elevated lifestyle is that the kids end up spending like (or to keep up with) their neighbors and don't develop the savings they would otherwise. I think its fine to help out with healthcare, but with the clear understanding that "you're too poor to afford this". If my kid can't afford health car after he buys a sports car, I would probably advise them to trade in the car, buy a used focus, and foot the bill themself.
KarlH is offline   Reply With Quote
Reply

Tags
college, eoc, medical


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Outpatient procedure, facility charges, how to lower the bill? LOL! Health and Early Retirement 49 09-27-2018 06:26 AM
Can you distinguish between a human financial adviser and a robot? Niuatoputapu FIRE and Money 3 04-21-2015 04:13 PM
Inpatient versus outpatient David1961 Other topics 7 03-16-2014 12:13 PM
Economic Outpatient Care Milton FIRE and Money 27 02-17-2008 04:44 PM
UAW on EOC Jane Other topics 20 08-16-2004 04:07 AM

» Quick Links

 
All times are GMT -6. The time now is 10:42 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.