Investing in your Grandchild’s Future with Pioneer Wealth Advisers

Sometimes we get so caught up in welcoming a new baby to the family that we might forget what gifts matter the most. How many of you have ensured your new grandson or granddaughter has everything on that registry list? What was the most used item from that list? What items never got used? All the gifts you treated your new grandbaby to were very appreciated and parents just loved them,  I am sure! I can tell you for sure that some of the most well-loved gifts for my children were the ones that I can pass down to each child or pass down to their children when they are ready. Investing in their future is one of the best gifts you can give to your new grandchild alongside all those other fun cute items!

What do you want to invest more in for your grandchild’s future?

What do most grandparents want for their tiny newborn grandbabies? The best they will tell you! Yes, please spoil those little cuties with all the love and fun whenever you see them! You want your children and your grandchildren to be able to live a successful life. To experience camping trips, holidays, and maybe even Disneyland. 100% you are taking them to the Happiest Place on Earth! You want to see your grandchild get a good education, have a family, and repeat those beautiful traditions you have given your family.

3 ways to invest in your grandchild’s future.

There are many ways you can invest in your new grandchild’s future.

One way is to open a Custodial Roth IRA.

If your child has earned income from a part-time job, they can qualify for a custodial Roth IRA. The parent who opens the account manages the assets until the child reaches 18 years of age or 21 in some states.

Contributions to a Roth individual retirement account grow tax-free, and your child can even use the contributions, but not the earnings, for major expenses that pop up, this might be a car or a downpayment on a house, once the account has been funded for a minimum of five years.

Your child can withdraw money from the account, including earnings, for qualified education expenses without having to pay early withdrawal penalties.

Maybe you want something a little more focused, a  529 Education Savings Plan might be right for you.

If you are looking for a tool to invest in your child’s future college expenses, a 529 plan may be a path for you. There are no contribution limits, although you could run into the ceiling for the gift tax), and anyone is eligible to open and contribute to a 529.

There are two types of 529 plans: Prepaid tuition plans, where you buy college credits for the future at today’s prices, and education savings accounts where you build a balance and invest your money in the market.

These kinds of investment accounts can be used to pay for qualified education expenses, and you can choose from a range of mutual funds and exchange-traded fund (ETFs).

Withdrawals are tax-free, but only as long as they’re used for qualified education expenses. Depending on the state where you live, contributions may be tax deductible, or you may be eligible for a tax credit on your state income tax return.

My favorite way to invest in my child’s future is to educate them.

Teach Your Kids Investment Basics

Many people might not invest because they find the stock market can be too confusing, and how to get started is just too overwhelming. According to a recent Gallup poll, only 56% of Americans own stocks.

Opening an investment account provides you with a great way to educate your child about how the stock market works. Teaching on how investing can benefit them. This is a powerful way to provide your kids with the foundation they need to build long-term wealth.

 

The future is bright for your tiny new grandbaby. I invite you to reach out to your local financial advisor.  Here you can learn more about which is the investment for your newest family member. I will leave you some info to help find just the person to ask about investing in your grandchild’s future. Click here to reach out to Scott Clauson with Pioneer Wealth Advisors.

To find out more about some local connections for your new baby read more blogs here.