Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Ask Suze & KT Anything: What Kind of Life Insurance Should I Have for My Child?
Sep 28, 2023
The hosts answer questions about trusts, IRAs, reverse mortgages, and savings accounts for children. They discuss the drawbacks of a Gerber savings account and suggest a better alternative. They also talk about the importance of insurance for children and spouses, and share their views on government shutdowns, ETF scare tactics, and hurricane preparedness. They highlight the benefits of opening a kid's ultimate opportunity savings account for financial education and savings.
37:24
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Quick takeaways
- Achieving a high rate of return on a compound savings account for a child's future requires careful investment in ETFs with historically higher returns.
- When considering insurance options, term insurance is recommended for children and adults to protect against financial loss and dependents' needs.
Deep dives
Starting and Managing a Compound Savings Account for a Grandchild
A listener asks about starting a compound savings account for their seven-year-old granddaughter. They plan to contribute $2,000 per year for eight years and leave the funds untouched until she turns 54. If the interest rate averages at around 13% over the next 47 years, the account could potentially grow to $2.3 million. However, it's important to note that achieving such a rate of return is not guaranteed. While the idea of providing long-term financial security for the granddaughter is commendable, it would require careful investment in exchange-traded funds (ETFs) that historically have shown higher returns.
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