Family Financial Planning Guide

An honest framework for the decisions at hand. Not tax or investment advice — your specifics matter.

The cardinal rule: retirement before college

• You can borrow for college (your kid can too). You cannot borrow for retirement.
• Maxing retirement accounts first is almost always right — the tax advantage + employer match + compound runway dwarfs 529 tax benefits.
• Kids with merit scholarships, in-state public, or community-to-4-year paths can cap college at $100-200K total. Retirement under-funding can cost $1M+.

529 plan strategy

• State tax deduction for in-state plan is often 5-9% — worth considering even if investment options are worse.
• Grandparent 529s no longer hurt financial aid (2024 FAFSA changes). If grandparents are wealthy and generous, route college funding through them.
• Superfunding: one person can front-load 5 years of gift-tax-exclusion contributions ($90K solo / $180K couple in 2024). Useful when a large, irregular windfall needs a tax-efficient home.
• Over-funding risk: unused 529 funds can now be rolled to Roth IRA for the beneficiary ($35K lifetime cap, 15-year account age required, annual IRA limits apply).

Term life insurance layering

• Rule of thumb: 10-15x annual income per earner. Two-earner household: both earners need coverage, not just the higher earner.
• Term (not whole life) until kids are self-sufficient + mortgage paid. Whole life commissions are why it's pushed; term is what most families actually need.
• 20-30 year level term locks pricing. Laddering (e.g., $500K 30-year + $1M 15-year) lets coverage decline with need.

Disability insurance — the most underbought

• Probability of disability between age 35-65 is ~25% — higher than mortality.
• Group LTD through employer often caps at 60% of base salary and pays in taxable dollars. Individual LTD on top can get to 80% of total comp, tax-free if you pay the premium.
• Own-occupation definition matters enormously. 'Unable to do any job' vs 'unable to do your specific profession' is a vast difference.

Estate planning basics every family needs

• Will: appoint guardian for minor children. Without a will, state law decides.
• Revocable living trust: avoids probate, keeps minor-kid beneficiary structure private.
• HIPAA authorization + healthcare POA: lets your spouse (and adult kids once they're 18) handle health decisions.
• Financial POA: handles finances if you're incapacitated.
• Review every 3-5 years or after major events (new kid, move, death, divorce, significant asset change).

The coordination advantage

• Where families over-spend: buying whole life, maintaining outdated asset allocations, neglecting beneficiary updates, missing 529 state benefits.
• Where families under-spend: not getting proper disability, under-insured on term life, no estate documents beyond a basic will.
• A fee-only family-specialist advisor coordinates across these rather than selling what they earn commission on.