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Savings or Brokerage account for young kids?
Posted on 6/30/25 at 11:08 am
Posted on 6/30/25 at 11:08 am
What does the M-T board do. My wife is bent on a savings for some reason, but I feel like that will be just burning money with inflation after 20 years.
8
Posted on 6/30/25 at 11:10 am to The Scofflaw
quote:
What does the M-T board do. My wife is bent on a savings for some reason, but I feel like that will be just burning money with inflation after 20 years.
What is the purpose of the account?
Posted on 6/30/25 at 11:17 am to GoCrazyAuburn
Just to have some type of value for the kids when they reach adulthood. I just think a savings is a horrible idea with inflation so high.
Posted on 6/30/25 at 11:17 am to The Scofflaw
If it's something you're doing for the next 15-18 years, you're doing yourself a disservice by just going with a traditional savings account. Or even a HYSA earning 3.5-4%. If investing in something like a broad index fund over that time period yields less than a savings account, we're all fricked financially anyways.
Posted on 6/30/25 at 11:20 am to The Scofflaw
Yea, at a bare minimum put it in a HYSA or money market. A standard savings account won't do anything, unless the goal is to just have some money set aside for him to teach him about banking and savings. If this is you putting it aside to be a little getting started help down the road, brokerage or HYSA/Money market for sure.
Posted on 6/30/25 at 11:21 am to The Scofflaw
I have a brokerage account for my kids. It’s in my name though and it’s the S&P 500 ETF. I didn’t want to do a UTMA account for them though because I didn’t want to be obligated to give them the funds at a certain age or if I thought they couldn’t handle X amount of money at that point of their life.
Posted on 6/30/25 at 11:22 am to The Scofflaw
Savings does not exist. Your wife needs to understand this.
You are putting money into accounts where the market is helping with inflation or you are just losing purchasing power having random money in an account for your kids.
Saving money is dumb. Invest it or spend it.
You are putting money into accounts where the market is helping with inflation or you are just losing purchasing power having random money in an account for your kids.
Saving money is dumb. Invest it or spend it.
Posted on 6/30/25 at 11:24 am to The Scofflaw
I like 529 with the ability to convert $35K to Roth IRA once they are older.
Ideally, you find a way for kids to earn some income and you stash all of it into Roth IRA.
Ideally, you find a way for kids to earn some income and you stash all of it into Roth IRA.
Posted on 6/30/25 at 11:41 am to The Scofflaw
529
Roth once they are earning income
Taxable brokerage for them to manage a bit themselves.
Fidelity has a youth account w educational features where they can earn a few $. Son is putting his allowance, gifts, etc into VTI and understands not to try to beat pros picking stlcks or time market.
Roth once they are earning income
Taxable brokerage for them to manage a bit themselves.
Fidelity has a youth account w educational features where they can earn a few $. Son is putting his allowance, gifts, etc into VTI and understands not to try to beat pros picking stlcks or time market.
Posted on 6/30/25 at 11:46 am to lynxcat
quote:like pay my 2yo and 4yo for doing advertising work for my contracting business?
Ideally, you find a way for kids to earn some income and you stash all of it into Roth IRA.
Posted on 6/30/25 at 11:56 am to The Scofflaw
Get an account in your name.
Gift shares to them when they are adults. You can do it over time. Up to $18000 per year per kid- I think.
I had stock accounts in their name.
It’s a little bit of a hassle to change the accounts when they become adults.
It’s not impossible, but it’s not friction free.
Gift shares to them when they are adults. You can do it over time. Up to $18000 per year per kid- I think.
I had stock accounts in their name.
It’s a little bit of a hassle to change the accounts when they become adults.
It’s not impossible, but it’s not friction free.
Posted on 6/30/25 at 12:33 pm to Bryant91092
quote:
I have a brokerage account for my kids. It’s in my name though and it’s the S&P 500 ETF. I didn’t want to do a UTMA account for them though because I didn’t want to be obligated to give them the funds at a certain age or if I thought they couldn’t handle X amount of money at that point of their life.
I understand with the not wanting to automatically turn it over at 18-21ish, but I went with a UTMA for our daughter for the tax benefits. The dividends and STCG in that UTMA account we wont have to pay any tax on for a very long time, and once we do, it wont be at our much much higher rate
Posted on 6/30/25 at 1:27 pm to thunderbird1100
One consideration to be aware of, assets in a non retirement brokerage in kid's name count against them at a higher rate on FAFSA than parent assets.
My plan is to use the funds in kid's account before college for car or to move it over to Roth when they get jobs in HS
My plan is to use the funds in kid's account before college for car or to move it over to Roth when they get jobs in HS
Posted on 6/30/25 at 1:46 pm to Bryant91092
quote:
I didn’t want to do a UTMA account for them though because I didn’t want to be obligated to give them the funds at a certain age
Are you obligated to tell them? lol
Just open the account for them with their social. Tell them when you're ready..
This post was edited on 6/30/25 at 2:07 pm
Posted on 6/30/25 at 8:31 pm to The Scofflaw
Living Trust
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