I'm 24yo active duty E4 with a stay at home Wife and an infant Son.
Current Investments:
- $27,000 in TSP, contributing $330 monthly
- $18,000 in Roth IRA w/ Vanguard contributing $583 monthly (Max)
- $13,000 in HYSA contributing $500-400 monthly (Depending on budget)
I'm trying to get advice on which account to open for my Son (529, Brokerage, UGMA/UTMA). He will be receiving my full post 9/11 GI bill to cover 36 months of all school related expenses, but I'm trying to prepare him just a little more. I figured the 529 would be dumb since it's a school expenses account, so I guess I just need help deciding between the two brokerage options. TIA
Disclaimer: I know it's better to max out my retirement contributions but I plan on retiring from the military and I really want to make sure my Son is set.
What to invest in for child?
byu/Open_Reindeer_6600 inMilitaryFinance
Posted by Open_Reindeer_6600
4 Comments
I opened a UTMA for each of my kids when they were born, started with a $2K lump sum, then I put $10 in each month. I just keep buying VOO (S&P 500 index fund) with that. I figure that way, there should be a decent nest egg for school expenses or house down payment or fighting off fascists in the streets.
I use a state managed 529 account. Some states are better than others but I like the flexibility of the 529 and it works for us.
Like most financial things it depends, what’s the intent for this money being earmarked for the kiddo? If the intent is for it to be a a nest egg for future expenses like a house down payment, wedding, etc. UTMA is probably a better option move.
You could also open a taxable brokerage in your name and gift it down the road if you’re not sure they’d be mature enough to manage a large sum of money at 18 or 21.
If you think you might have a 2nd kid down the road, you could open a 529 in your name and start that college fund now to let compound interest carry the weight of that boat. Then put it in their name down the road. That way you don’t have to split the GI Bill up and everyone gets a fair shake.
Lots of ways to think about it. Either way you’re being a good parent and looking out for your kids future so big ups to you.
As an NCO I just want you to know ow this is so great to see a lower enlisted soldier being so financially responsible. Good for you and your family!