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So, I have a six month old. She is a princess! We would start an investment for her. We would like to put in a weekly amount and bday and Christmas gifts as well. My wife checked at her bank and we can start a tax free college investment. Sounds good, but it can only be used for college. The other option is a costodial account. With this, it’s hers at 18 to do whatever. Again, not what we are looking for. I would like some control over it so it can be used for collage, or down payment, purchase a car, etc. Thinking IRA stock investment with weekly contributions. Thoughts? P226 9mm CT Springfield custom 1911 hardball Glock 21 Les Baer Special Tactical AR-15 | ||
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| Paddle your own canoe  |
IRA's are required to be funded with earned money, so that's not going to work. If she were working you could give her the money for the IRA up to the limit for contributions or the amount of her wages if less than the limit. | |||
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| Paddle your own canoe |
Having said that I pondered that same dilemma for my kids and now for my grand kids. I decided on the UGMA that you turn over to them at 18. Worked out fine for my kids. For my grandkids I plan to contribute an amount that gives them a little spending money.And along the way if I see they are turning into shitheads I will quit contributing. I have now set up family trusts for both sons to which my wife and I can contribute $14K each, as well as $14k each for the grandchildren (goes to $15K in 2018). The sons are the Trustee so after I give that money I have no control over it. Of course I DO have control over IF I give them any the next year!! | |||
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| Little ray of sunshine  |
Can you get a super low fee mutual fund (Vanguard has lots) set up as an UGMA account? The fish is mute, expressionless. The fish doesn't think because the fish knows everything. | |||
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| Paddle your own canoe |
Yes you can. My grandson is in the Wellington Fund I believe. Not all funds are available but a lot are. | |||
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| I believe in the principle of Due Process  |
Here is the link to Charles Schwab UGTA account info. I’m sure others are similar. Luckily, I have enough willpower to control the driving ambition that rages within me. When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown | |||
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| Raised Hands Surround Us Three Nails To Protect Us  |
Not exactly the case. You just pay a penalty if it is not used for college. 529s are not a bad idea unless you know for some reason that it will not be used for college. ———————————————— The world's not perfect, but it's not that bad. If we got each other, and that's all we have. I will be your brother, and I'll hold your hand. You should know I'll be there for you! | |||
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| Member |
Good point. I just wonder if 17 years down the road will college be “free”? Or will there be so many grads that you can’t land a job. By then it might pay more having a trade under your belt. Sure I’m going deep. P226 9mm CT Springfield custom 1911 hardball Glock 21 Les Baer Special Tactical AR-15 | |||
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| Shit don't mean shit |
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| Member |
My buddy uses his kids 529s that were well funded by wealthy grandparents for everything for his 3 college age kids: tuition, books, room and board the definition of an education expense is pretty generous apparently. He cuts a check and then submits a receipt for reimbursement. If there’s any left after the kids graduate there’s a small tax penalty to pull it out for non school use. Personally I am with schwab, their in house index funds are lower in fees than vanguard or fidelity. They can be bought for as little as 1$ and subsequent investments can be as little as 1$ Just title it as an ugma if you want the kid to have full control at 18 or in your own name just earmarked for them or 529. Consult your tax advisor as you will likely have to pay the taxes on it if you put it in your own name but just earmarked for the child. Of course you could do 2 accounts an ugma and a 529 and mirror the investments just split the deposit up each month. | |||
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Drill Here, Drill Now |
Similar to JHE, I'd definitely say Vanguard (been with them a decade) but go the 529 route. However, you need to check on the 529 restrictions for the granddaughters state of residence not the OP's. Ego is the anesthesia that deadens the pain of stupidity DISCLAIMER: These are the author's own personal views and do not represent the views of the author's employer. | |||
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Thanks all, will look into it. Maybe two accounts is the answer. P226 9mm CT Springfield custom 1911 hardball Glock 21 Les Baer Special Tactical AR-15 | |||
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| Green grass and high tides  |
Check Vanguard. They have been a great asset for us. "Practice like you want to play in the game" | |||
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