John C Kim’s Columns on Korea Daily Newspaper

Financial Education Jewish give to their children

Many compare the similarities of Koreans and Jews in terms of diligence, educational fever, and fierce viability. However, two aspects, the native language education fever and financial education at home, are not to be comparable.

Today we will focus on financial education among Jewish families.

One of the Jewish traditions is the Bar Mitzvar. Torah to be recited in Hebrew in front of invited relatives and acquaintances to the synagogue on the birthday of 13 years old boy and 12 years old girl. “On the ceremony, boys and girls receive three gifts from parents and guests. Bible books, watches, and money.

The reason for receiving the Bible is that from now on, it means to live as a responsible man who directly talk to God, without the middle role of the parents, and the watch gives the means to keep the promise and cherish the value of time. All the guests' monetary gifts are kept in the child's bank account. This money will not be touched until the child is 18 years old, leaving his parents' arms. Later it becomes the seed money of economic independence for the child. The globally influential economic power of Jews, who grow up with saving habit and how to make the saved money grow resulted from this early financial training.

In Korea, some adulthood rituals are held in around schools, churches, and communities, but they are very different from those of Jews.

We invite our families and relatives to have a big birthday party a year after the baby is born. However, many families question whether or not they would save or invest the money they received in the name of their baby. Let's consider opening a retirement pension account as a way to raise money for the baby reaches college age.

Suppose your child's money gift is $ 2,000 and you use that as a seed money. Suppose you set up a pension account for your baby and contribute $ 200 per month under the name of one of parents. By the year when the patent reached 59.5 for the education in time for your baby college education. Or He can start at the age of 21, you can start social life with the saving of $ 107,604, suppose you calculate 6% compound interest by the time you graduate. If you invest in a company that pays a 10% bonus for a 21-year long-term investment, the final amount will be much higher, given the increased amount and the tax deferment of payments. The advantage of this account is that compared to the 529 College Student Fund Plan (see 529 Collage Saving Fund), it does not necessarily have to be spent for tuition after withdrawal, so there are no penalties for any part of the account even if you use for other than educational expenses.This account does not penalize you for applying for College Financial Aids and facilitates the transfer of withdrawals after expiration to other accounts, depending on lump sum or deferred withdrawal or circumstances.

In addition, by opening a small retirement pension account in parents’ name, and name the child as beneficiary who start working after leaving college, they have one saving account growing linked various blended indices performance with market volatile control.

At this point, it is necessary to consult with a retirement income insurance specialist to find out which product that can be maximizied growth fit to an individual needs.

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