Beneficial ways to save for your kids’ future
Worldwide the birth rates are falling and one of the main reasons is the cost of raising children has grown phenomenally over the past few years. The actual numbers are scary but if you plan and start saving from now you can secure your child’s future.
Ways and means to save for your children’s education
- Plan 529: These are savings plan under section 529 wherein educational institutions and state agencies encourage people to save for their children’s educational costs. These plans are tax-advantaged. So, by investing in this plan you are accumulating funds that can be used for college education and can be withdrawn tax-free. Another advantage of this plan is that you can change the beneficiary at no extra cost and there is no limit on the annual income.
- Roth IRA account: This account is suitable for teenagers who hold a part-time By opening a Roth IRA account these kids can use the funds for their college expenses. They are also securing their future when after their retirement they can withdraw the money tax-free.
- UGMA account: The Uniform Gifts to Minors Act is another investment option that is quite popular among parents. The money invested in this account can be used for other purposes besides education. This is a custodial account wherein the parents can withdraw money to cover all education or child related expenses till the child reaches adulthood. Once the child attains the legal age he or she can do whatever they want with the money in this account.
- Other options: You can invest in stocks or in the now popular automated trading robot like the Ethereum Code which trades in cryptocurrencies based on preprogrammed algorithms. The returns are significant and you can use them to save for the future or to
- Open a savings account: This is never the first choice for those who like to see quick benefits because the interest rates are abominably low. And that’s not all, the income you earn on these accounts is taxable. But having said that the safety offered by a savings account is unparalleled and your money is always protected and safe. It is also extremely easy to withdraw money from a savings account. In fact, a savings account must be the first account that you must open in your child’s name for a secure tomorrow.
Raising children is not that expensive if you plan for the future from now.