S4-17: Long-Term Care Insurance & Investing for Kids

Meghan, addressed a concern about the long-term financial viability of companies offering long-term care insurance, a common concern with any type of insurance that has a long-dated payout. Meghan discussed the importance of choosing a reliable insurance company for long-term policies. She emphasized the need to evaluate the company's track record and financials, and avoid those with a short history.

Meghan also suggested looking at insurance company ratings and their publicly available financials, as well as considering companies that have been around for a long time. She recommended working with an independent insurance broker for specialty policies like long-term care insurance, as they are familiar with policies and can navigate different insurance companies to meet the needs of their clients.

Meghan also addressed a question about investing approximately $10,000 for a child's future needs in seven years. Meghan stressed the importance of understanding the purpose of the investment, the time horizon, and the comfort level for risk. She suggested that the answers to these questions would guide the selection of the most suitable investment option.

Determining the purpose can lead you to more tax-advantaged options. Meghan discussed the benefits of tax-advantaged savings plans, such as a 529 plan, for future college education expenses. She explained that these plans allow for tax-deferred growth and no tax on withdrawals if used for qualified educational expenses. Meghan also addressed concerns about what happens to the money if a child doesn't go to college, mentioning options like changing the beneficiary or rolling over funds to a Roth IRA.

She also mentioned the potential use of a UTMA, a trust account for minors, but noted it wouldn't offer the same tax benefits. Meghan stressed the importance of understanding the intended purpose of the savings to guide the choice of account and investment strategies.

Meghan discussed the current market conditions, particularly the volatility due to the busy week of economic data releases and earning season. She highlighted the impact of major tech companies' earnings reports on the market, with Google and Starbucks experiencing earnings misses.

Meghan also pointed out the concentration of the main market index, the S&P 500, in a small number of large stocks, known as the "magnificent 7", which could amplify market reactions to these companies' performance.