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Best financial gift for a baby?
Posted on 11/5/23 at 7:26 pm
Posted on 11/5/23 at 7:26 pm
First birthday is around the corner, just wanting to set $1000 aside in something relatively safe that will grow and can be accessed when baby turns 18. Not necessarily earmarked for college.
Still setup 529?
Buy savings bonds?
Open HYSA?
Open 2 year CD with plan to constantly re-open?
Invest in mutual fund or etf?
Any advice is welcome, and open to any other suggestions as well. If it matters, I’m in Texas and baby is in Louisiana.
Still setup 529?
Buy savings bonds?
Open HYSA?
Open 2 year CD with plan to constantly re-open?
Invest in mutual fund or etf?
Any advice is welcome, and open to any other suggestions as well. If it matters, I’m in Texas and baby is in Louisiana.
11
Posted on 11/5/23 at 8:47 pm to Open Your Eyes
Bookmarked. Same situation.
I’m planning 529 contribution and then invest into total stock market index fund for next 18 years.
I’m planning 529 contribution and then invest into total stock market index fund for next 18 years.
Posted on 11/5/23 at 9:17 pm to Open Your Eyes
quote:Why relatively safe? You should go mainstream aggressive and just put it in some kind of equity ETF. I can see MAYBE waiting 6 months to see what will happen, but you know what they say about market timing.
set $1000 aside in something relatively safe
Posted on 11/6/23 at 1:06 am to Open Your Eyes
The only drawback I see to a 529 is if they don't end up going to school or end up with a full ride there is a penalty to the money (or you have to spend it all on food). So then it gets taxed with a penalty.
I'd do a total market type ETF and let it ride.
I'd do a total market type ETF and let it ride.
Posted on 11/6/23 at 5:12 am to Open Your Eyes
With the new rules allowing kids to roll over unused 529 funds up to $35k into a Roth, makes the 529 a no-brainer imo.
Wife and I started ours off with a little chunk and then we and some family members deposit every month with it invested in a broad market fund.
Cost dollar averaging plus time is the easy way to go.
Wife and I started ours off with a little chunk and then we and some family members deposit every month with it invested in a broad market fund.
Cost dollar averaging plus time is the easy way to go.
Posted on 11/6/23 at 5:14 am to Thundercles
You can roll into an IRA, if necessary, up to a certain amount. If you exceed that cap, you can reassign to another child. Lots of options.
This post was edited on 11/6/23 at 5:15 am
Posted on 11/6/23 at 5:24 am to CalcuttaTigah
What’s the boards thoughts on UTMA? Obviously one downfall is automatic ownership of funds transfer by 18/21.
Posted on 11/6/23 at 10:00 am to Open Your Eyes
I recently opened up and UTMA and funded my baby's account. I did not go the 529 route.
Posted on 11/6/23 at 10:02 am to MrJimBeam
quote:
What’s the boards thoughts on UTMA?
I like the idea of the UTMA to be able to use the funds as needed whether it is for school, housing, or wedding type stuff.
Posted on 11/6/23 at 10:25 am to Open Your Eyes
We started a 529 managed by Vanguard for our son when he was born through collegeinvest.org. Colorado lets us deduct our monthly contributions from state taxes. Some other states do as well.
Posted on 11/6/23 at 10:44 am to MrJimBeam
quote:
What’s the boards thoughts on UTMA? Obviously one downfall is automatic ownership of funds transfer by 18/21.
It does scare me on auto transfer. I have one set up for my daughters wedding way down the road. She's early grade school but wanted to be prepared.
Also have a 529 set up for all my kids.
Posted on 11/6/23 at 11:35 am to Billy Blanks
Same as me. I have UTMA and 529 for both. I want sure I’d this was the best overall route for savings or not. I figured anything else can just be transferred from my account when needed down the road. UTMA was mainly to help plan for first car, weddings, etc.
Posted on 11/6/23 at 11:39 am to Open Your Eyes
I would go in a completely different direction. A lifetime sportsman’s license at that age might have a greater ROI than most investments. Not that a gift is all about that. It’s also a lot more fun than a financial gift.
Posted on 11/6/23 at 12:22 pm to Uroblast
Huh?
Posted on 11/6/23 at 12:46 pm to Uroblast
quote:
A lifetime sportsman’s license
Can be a good gift if the person actually likes to hunt and/or fish. But, it's only useful if the kid stays in the state.
Posted on 11/6/23 at 4:42 pm to Open Your Eyes
No strong suggestion any which way, but for those who might not know: one quirk of TX having no state income tax is that you don't lose out on a tax deduction for contributing to a 529 plan out of state. You can shop around the entire country for the plan(s) you think are best with virtually no downside. Alaska, Ohio, and New York's are all pretty solid. LA has a good one, too!
Posted on 11/6/23 at 7:30 pm to messyjesse
Utah is where we ended up choosing.
Posted on 11/6/23 at 7:58 pm to messyjesse
What makes those states 529s better than the others?
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