During this holiday season, you want to give a gift that keeps on giving. Financial gifts are one of the best ways to give a meaningful gift. It can help them move forward on their path to financial wellness. Continue reading for three gift ideas you can get someone for their financial future.
1. 529 Plans
You can give a 529 plan for the child or children in your life. These plans are made specifically for college savings. Over their lifetime, you and other loved ones can contribute to the 529 plan to lower the burden of college tuition costs for them later in life. As time goes on, the contributions can grow and compound to build a significant sum. The gift of decreased college tuition is an extremely valuable gift for a loved one. It is important to keep in mind that the funds within a 529 plan can only be used for qualified education expenses, such as tuition and fees. However, the Secure Act 2.0 allows up to $35,000 of unused 529 money to be rolled over into a Roth IRA for the named beneficiary.
If the children in your life already have a 529 plan, you can make a contribution to the existing 529 instead of opening a new one. The account owner can also change the beneficiary to another student to make use of any residual 529 funds not needed by the original beneficiary.
We (Firethorn) have used to the gift of individual shares of company stock as a wonderful teaching tool for the curious and inquisitive young investor. It can be a fun and engaging way to teach math to children. Building long-term wealth is a bonus to such a strategy.
A parent or a benefactor can open a custodial account in their name for the benefit of the child. The account is then transferred to the recipient to control themselves upon reaching the age of 18. You can also open a Roth IRA for the child as long as he or she has earned income.
Make it a fun experience when buying stock for a child! Have the child pick a company or an industry that they like. Children are frequently very good stock pickers based on brand awareness and early adoption of a new trend or technology. They naturally gravitate toward companies with long-term growth potential.
3. A Session with A Financial Planner
We love to spend time with our client’s children. These present great planning exercises as young families or that child just starting a career have completely different planning needs than their parents. Everyone can gain value from meeting a financial planner. As you move through life, there are many different transitions and changes in life that affect your finances, such as changing careers, getting married, buying a home, and starting a family. A good advisor can help your loved one evaluate their financial goals and make the necessary adjustments along the way to maximize planning success. A session with a financial advisor can be an educational experience they use for a lifetime.
The holiday season is a great time to support a loved one with a financial gift and help them grow a positive relationship with personal finance.
It can be helpful to have a professional’s advice no matter your age or stage of life.