Investing in a retirement account for your toddler or teen might sound crazy, but it's one of the easiest ways to transfer and build wealth for their future. By starting early, you can take advantage of compounding interest and give your child a head start in financial security.
Many successful investors will tell you they wish they would have started investing sooner. So let's look at the best investment accounts for kids in 2023, including custodial Roth IRAs, which have no age limits, and 529 college savings plans, ideal for funding higher education.
No matter what you're saving for, what your risk tolerance is, and what features you want, you can find an investment account for kids that suits your needs. Whether it's for college, retirement, or simply teaching your child about financial responsibility, there are options available.
A minor child may be named on a brokerage account if a parent or guardian opens a custodial account with the child. This allows the child to benefit from the account's growth and learn about investing from an early age.
Saving for college does not have to mean anticipating every expense to ensure you've prepaid your child's higher education endeavors. 529 college savings plans provide a tax-advantaged way to save for future education expenses.
Getting kids started with investing early can have major benefit down the road. By teaching them about investing and introducing them to investment accounts designed for kids, you can instill valuable financial habits that will benefit them for a lifetime.
Use custodial brokerage accounts to save for your kids' futures and teach them to invest early. These accounts allow parents or guardians to manage investments on behalf of the child until they reach adulthood.
Roth IRAs for kids are a great retirement tool because children have decades for their contributions to grow tax-free. Contributions can be withdrawn penalty-free for education expenses, making it an attractive option for saving for both college and retirement.
