Quote:
Originally Posted by Buehler445
So my kids (3 and 7) are getting some reasonable amounts of cash built up in their savings accounts.
I tossed it to the wife that maybe we should start a Roth for the kids, even if they don't put any more in it until after college, they should have serious gains and a hell of a head start. She wasn't thrilled about the idea, thinking they couldn't get it out if they needed it. After 5 years they should be able to borrow the basis. Plus, I think there is some value in the fact there are barriers to exit. If my kids suck (hey, my sister exists), and I can't pass on anything, they'll still have something come retirement.
Anybody have any thoughts on this?
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You cannot start a Roth for your kids unless they have earned employment income, so that’s out at their age. 529 plans are intriguing assuming they are utilized for educational purposes. I like the idea of doing a taxable brokerage account for them and allowing them the flexibility to work with you in selecting their investments, etc. You can use that as a good way to educate them on selecting tax favorable investments since it is a brokerage account as opposed to a Roth or Traditional IRA or 529 plan.