If you have grandchildren, you may want to help them along in life by making some financial gifts - but which ones?
You have several options.
For starters, consider a 529 education savings plan, which can be used for college, approved trade school programs, qualified student loan repayments, and even some K-12 costs.
A 529 plan can offer tax benefits, but the tax issues can be complex, so before investing, you’ll want to consult with your tax advisor.
As another possible financial gift, you could contribute to your grandchild’s Roth IRA, which also offers tax benefits.
The annual contribution limit is generally $6,500 or the amount of your grandchild’s taxable compensation, whichever is less.
Still, another possibility is a custodial account, which can be a good way to get your grandchildren interested in investing.
Be aware, though, that once grandchildren reach the age of termination — usually 18 or 21, they gain full control of the account and can do what they want with the money.
Making financial gifts to your grandchildren can be rewarding - for them and for you.
So, consider the possibilities for putting your generosity to work.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
