THE MOM TROTTER
What is a Custodial IRA?
A custodial IRA of any type is simply money saved into an Individual Retirement Account from income earned by your child.
The two most common IRAS’s that you can open for your child as a custodial account, the traditional & the Roth.
What is a 529 savings plan?
These plans allow the earnings to grow on a tax-deferred basis and if used in accordance with the plan rules for education expenses, the funds are federal income tax-free.
One more advantage I’d like to highlight is that these 529 plans have no annual contribution limits, age, or income limits!
What is an UGMA or UTMA account?
A custodial account that is typically controlled by a guardian. The account will then transfer ownership to the minor when they reach the age of majority in their state, usually 21, but in some cases as early as 18.
These accounts make it easy for you to give financial gifts or assets to a child!