Brokerage account for child

It kind of depends on what you want.

You could always set up a custodial account and hand it over when he turns 18.

You may also want to look into the new Trump accounts that will be available in about a month. He won't be eligible for the one-time $1k contribution from the government, but it would still essentially act as a retirement account that turns into a traditional IRA @ 18. You would need to look up the limitations on withdrawals to see if that is something you would want to do.

I opened a custodian account for all my grandkids. Funded each with 50% s&p500 and 50% nvda. Have since added to it with 50% s&p and 50% goog. I have a discussion with each kid whenever I add money. Hoping to get them interested. I have had 2 teenagers put in small amounts of their own money.

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Bring him to Mass on Sunday and remind him the Lord gets the first 10%

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God doesnt need my money.

Only use these accounts if you get the free 1k and don’t add to it. These accounts are set up badly for returns

Depends on your goals for him. A UTMA/UGMA account is the most flexible when it comes to withdrawals. After he turns 18, he can withdraw without penalty. This is a taxable account (only earnings, not contributions since taxes have already been paid on them) and the first $1350 in earnings is tax free, the next $1350 at his tax rate, which may be 10%, then after that it’s taxed at the parents tax rate.

The disadvantage of a Roth is the penalty for early withdrawal before age 59 1/2 (or for a first time home purchase, or other very specific reasons) but if the goal is to invest for his retirement, this may be a good fit.

The other option is a 529 educational account which can only be used to fund education.

I’ve set up a UTMA for my
3 yo grandchild, but may also set up a 529 and/or a Roth later on.

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Only use these accounts if you get the free 1k and don’t add to it. These accounts are set up badly for returns

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You're right, fhey're not the most efficient since they are funded with post tax contributions then treated as a traditional IRA (taxed at income tax rates instead of lower LTCG rate). Thus, you're paying income tax rate twice. There may be another compelling limited use case to seed Roth conversions especially for older teens as they wouldnt face many years of growth before converting.

Since OP's kid has income I'd fund Roth first. I plan to give a match when mine start working. Several multiples just to make sure they max Roth each year.

I set mine up at 13 with a youth brokerage they can invest in use for spending on debit card. Will open Roth as soon as they have earned income.