Investment fund for the grandkids???

[mlevimadden]

What mutual or index funds are people liking?

I just do a total market or S&P500 fund for most of my fund purchases. Vanguard are hard to beat for the 0.04% expense ratio on most of them.

VTI/VTSAX is a total market fund
VOO/VFAIX is an S&P500 fund

 

[NevadaMike]

I do not like active Fund managers or commission based financial advisors. This eats up growth unnecessarily and with the timeline you have it will be substantial 30 years from now! We have a trust set up for our kids education and some is 529 as mentioned and some is not based on contribution limits. If you are a set it and forget it guy I would suggest the Vanguard target date funds and let it ride after you talk to them about how you should hold it. Target date funds adjust risk based on when you want it available. Vanguard is also known for some of the lowest fees in the industry and as I mentioned this will result in a substantial increase over 30 years vs paying someone to "manage" your funds.

 

[cornfedkiller]

529's are after tax accounts, so you pay your income tax on the money that goes into it.

Got it! I was wrong in my understanding of it then. Thank you for correcting me!

 

[dubbeltap69]

The only problem with contributing directly to a Roth for young children is they need to have earned income to be eligible to contribute. Definitely not a bad strategy, but not one I’d do as a grandparent without the parents consent and agreement on strategy, since you’re front loading the tax burden.

Thanks for this information. I was unaware of that requirement.

 

[Crghss]

Use Vanguard ETF’s (Vanguard usually has lowest fees)
Spilt between S&P 500 and Tech.
Something like VOO and VGT

Just a general idea but where I’d start.

 

[Marble]

Thanks for the advice thus far. Not interested in a college fun I’m wanting this to be a whatever they want/need when a little older. I like the idea of just opening another investment fund earmarked for them and give them access when they are older.

If you include it in your living trust, it can be on autopilot with you having to do nothing after setting it up. You'll have full control of it, can add to it or withdraw. You can even earn mark a portion of what you already have invested and not even create a separate account.

Sent from my SM-S918U using Tapatalk

 

[Gman12]

I have a 529 plan for my kids and I also opened up a mutual fund for them as well. I usually contribute money in the account for their birthdays. It is a target date fund where the money is invested more aggressively at first but gets more conservative as they near retirement age. I think their target date is something like 2055. I didn't really intend for it to be for their retirement but more for something like a down payment on their first house.

I will have control over the money and have to approve whatever they want to use it for so they won't be able to use it for a depreciating asset like a car.

 

[Article 4]

There are multiple avenues

• 529 - is great but limited to education spending - can be passed to 2nd child if not full used
• Roth IRA - great idea but money is locked until 59 1/2 unless big penalties are paid - taxed up front and grows tax free
• Annuity - works like a personal pension with nearly guaranteed payouts, can start investing on behalf of the child anytime but money locked until 59 1/2
• Whole life insurance, often overlooked but can create cash value, is nearly tax free and grows for life. The child can assume ownership at 18

 

[Historybuff]

Buy bitcoin, bitcoin etfs, or mstr. It's not too late

 

[Z Barebow]

Not sure if this is still an option. I did a gift trust for my oldest daughter when she was born. It was irrevocable. But I set the maturity date. (25 years old in my case) Money was invested in a growth fund. I could add to it as I was able. When she turned 25, money (including growth) was hers. To spend on school loans, car or drugs. I had no say. I have never asked her where the money went, nut it wasn't drugs! LOL!

Learn About Your Giftrust®

What it is, when you can access the money, and the tax responsibilities. As of June 2017, new Giftrust accounts are no longer available.

www.americancentury.com

EDIT: Sorry. American Century no longer offers them.

 

[Habitat#1]

Don't forget lifetime hunting and fishing permits if your state has them

 

[Brock A]

I have custodial accounts for my kids

Custodial Accounts

If you want to give a minor a gift of investments or cash, opening a custodial account may be one solution. A custodial account is managed by a custodian on behalf of a minor who is the account owner. These accounts hold assets the custodian use for various reasons as long as the minor benefits...

www.edwardjones.com

 

[LostArra]

I like Marble's ideas which is what I have done. Keep your money, invest it but keep control of it. Put a distribution plan in a trust. Or when the child starts college then just pay for it. Think of it as a pre-death inheritance. I would prefer to give my children and grandchildren some financial help before I'm dead.

Before 529's started loosening the distribution rules they were nothing more than another excuse for colleges to skyrocket tuition expenses much like the student loan racket.

 

[Mojave]

My cousin got a pretty huge number when he turned 40. He felt like he suffered a lot between 18-40 and that it wasn't fair.

40 seems pretty late to me as well.

In my 50's now, I am not so sure that 35 is too young and 40 is too old.

I was retired from the military at 39.

Doubt whatever age you pick, it will be the right one. The downside is if they get in a car accident when hey are 18 and never see a dime. So make sure you build in contingencies.