I recently started working with a financial planner and he has been pushing me to purchase whole life insurance. Seeing as it comes at such a high cost I am a little resilient and want to do my research first. The planner is also a friend of mine, and the first planner I have talked to that I can understand and speak clearly with.
A bit of background on myself. I am 25 yo Canadian with an electrical engineering degree, working into a project management position. I am making around $145k right now, however this may decrease as I am tired of working in the conditions of the oil field. I've got under $10k in debt, $7k of which is low cost student loans (2.5%), rest is student loan at 5%, which I plan to pay off by August. $40k in RSP, $7k in TFSA. $10k in other savings that I am planning to use part of as a down payment on a vehicle. As for the vehicle, I would take ~$20k loan at about 4%. This will likely happen in next couple months. I contribute 5% automatically to a group RSP through my company which is matched. I have benefits such a life insurance and disability insurance. I would have to look further to find what I am all covered for. Monthly living expenses are <$1000, however my spending habits are the not greatest, but are starting to improve. I am shifting from spending than investing, to investing than spending.
I have a girlfriend that is looking like will be the wife once she finishes school. She will have ~$175k USD in student debt upon finishing her doctorate of chiropractic. This is a ton of debt, but luckily she is going into a well paying field and it will be manageable. Also unfortunate her debt is in American dollars. We are planning to live in the USA (as long as a wall isn't built) for at least a few years as I have an opportunity with the company I am working with, and she wants some USD to chop down those loans. Depending on how long we plan to stay in the states, we would be looking to purchase a home in the next 5 years. Nothing overly fancy, something that we can live in for now and renovate down the road if we decide to do so.
I recently started investing $750/mo into both TFSA and RSP, on top of what I contribute through my group RSP. Since I started so late with the TFSA, I have a lot of room available. When I limit my spending I can set aside a fair bit of money every month.
My planner wants me to get a whole life policy that would cost roughly $1500 a year. I am a little concerned about the cost of this, although the long term benefits sound pretty good. The tax free cash value seems like a decent idea for retirement, although I hear so many mixed opinions about these policies. Right now I feel the best idea is to focus on maxing out TFSA and RSP, and only considering a whole life policy once I have done this. At this point in my life I really don't need much for life insurance, but this will change in the coming years with kids and a mortgage.
So my question is this, for someone in my financial situation is a whole life policy a good long term investment? Are there people hear with this type of policy who have good reasoning to either avoid or pursue such a policy.
I'm quite new to the financial planning and investment thing, as just want some second opinions before I commit to anything long term.
Submitted April 20, 2017 at 10:04PM by khalma11 http://ift.tt/2oQ4L2H
