RETIREMENT INVESTING, & MAKE YOUR CHILD A MILLIONAIRE | Summary and Q&A

TL;DR

A teacher reaches out for advice on choosing the best retirement investment options and starting a trust.

Key Insights

• ☠️ Rate of returns and long-term performance should guide investment choices for retirement accounts.
• 🏬 The fixed account offered by the New York City pool department is exceptional with a 7.25% return.
• ❓ Consultation with an attorney licensed in your state is vital when starting a trust.
• 🏛️ Compounding interest and early investing are powerful strategies for building significant wealth in retirement accounts.
• ↩️ Diversification is essential for minimizing risk and maximizing returns in retirement investments.
• 👶 Self-employed individuals have the advantage of hiring their children, saving on taxes, and contributing to their children's retirement accounts.
• 💁 The legal club or Facebook group can provide information on attorneys and professionals for trust establishment and guidance.

Transcript

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Questions & Answers

Q: How should I choose between the diversified and fixed options for my tax-deferred annuity?

Look at the rate of returns over the longest time frame, such as 10 years, and consider growth funds for better performance. It ultimately depends on your risk tolerance.

Q: What is the fixed account paying, and should I keep money in it?

The fixed account pays 7.25%, which is impressive compared to typical fixed accounts. It provides stability, and it is recommended to diversify but keep a portion in the fixed account for guaranteed returns.

Q: Who should I consult to start a trust?

Finding an attorney licensed in your state is crucial, as trust regulations vary. Recommendations for attorneys or a legal club in the Facebook group can be helpful in finding the right professional.

Q: How much should I contribute to an IRA for my child, and when will it amount to a million dollars?

The maximum contribution is $6,000, and the example given was from ages 14 to 20. By earning an average of 10% annually, a million dollars can be achieved by age 60. This highlights the power of compounding interest and investing early.

Summary & Key Takeaways

• The teacher has a tax-deferred annuity (TDA) and wants to know the best way to choose between the diversified and fixed options.

• The speaker advises looking at the rate of returns over the longest possible time frame and considers growth funds for better performance.

• The fixed account offered by the New York City pool department is commendable, earning a fixed 7% return, and diversification is recommended.

• Another question is about starting a trust, and the speaker suggests finding an attorney licensed in the relevant state to ensure proper legal guidance.