jitterbug
Established Member
Joined: Jan 4, 2011 18:14:48 GMT -5
Posts: 379
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Post by jitterbug on Nov 29, 2014 13:07:52 GMT -5
We are new grandparents and want to start a fund for our grandson. I'm not a fan of 529 Plans, as my son was gifted one and didn't go to college, but is still a good kid. Luckily, the same grandparent gave him savings bonds when he was young and that ended up being the down payment on his house. So we want to be the same generous grandparents...and recognize that college isn't for everyone. We want something that remains in our control until we determine he's ready for a gift. So what we are thinking is a mutual fund, in our name, but designated (in our minds) as his. We plan to add $1,000 at each birthday. This is a "behind the scenes gift" - meaning he probably won't know about it until he's given the whole investment when he's >18.
We think the simplest fund would be an age based fund. But our question is - do we pick a fund that assumes he'll need it in 18 years - or do we pick a fund that reflects his actual age, which is sometime in the far future?
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Deleted
Joined: Apr 20, 2024 4:24:56 GMT -5
Posts: 0
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Post by Deleted on Nov 29, 2014 13:15:55 GMT -5
Maybe set aside now and then when he gets his first job gift into an IRA until he is in a position to fund it himself?
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The Virginian
Senior Member
"Formal education makes you a living, self education makes you a fortune."
Joined: Dec 20, 2010 18:05:58 GMT -5
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Today's Mood: Cautiously Optimistic
Location: Somewhere between Virginia & Florida !
Favorite Drink: Something Wet & Cold
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Post by The Virginian on Nov 29, 2014 14:18:41 GMT -5
I am setting up a Living Trust for my children and Grandchildren. I am putting money into Stocks and some select ETFs for them that will pay my children x dollars a month and then when my children die it will be passed on to the grand kids. There are a thousand different ways to set it up according to your objectives. (In my case they have to be at least 25 years of age as I want some maturity in them )
Another way to do it is simply open the accounts and put your grandchild as the beneficiary of the accounts
Another thing you can possibly do is use the money to purchase life insurance policies on yourself they will pay out to them when you die,
Personally I don't like Mutual Funds because of their high expenses but if you do choose would go for a low cost one like an S&P Index Fund - You can find the same thing in an ETF.
Some good choices (IMO) are SPY, VOO, IVV, SCHX, SCHD, SCHM ...........
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Ombud
Junior Associate
Joined: Jan 14, 2013 23:21:04 GMT -5
Posts: 7,592
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Post by Ombud on Nov 29, 2014 17:52:57 GMT -5
You can find the same thing in an ETF. Some good choices (IMO) are SPY, VOO, IVV, SCHX, SCHD, SCHM ........... The ones I did are in bold
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Bluerobin
Senior Associate
Joined: Dec 20, 2010 14:24:30 GMT -5
Posts: 17,345
Location: NEPA
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Post by Bluerobin on Dec 3, 2014 16:44:43 GMT -5
I set up a "trust" account for my nephews under the Uniform Gift To Minors Act. I was the trustee. Check with a bank or stock broker for advice on this.
Another option is to buy insurance for the kids, but make sure it can be cashed out for the value of the account when needed.
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Ombud
Junior Associate
Joined: Jan 14, 2013 23:21:04 GMT -5
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Post by Ombud on Dec 3, 2014 22:32:08 GMT -5
Bluerobin, Sounds interesting. What kind of insurance can be cashed out for the full amount you put into it? I'm familiar with term and whole life but those are the only two
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Bluerobin
Senior Associate
Joined: Dec 20, 2010 14:24:30 GMT -5
Posts: 17,345
Location: NEPA
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Post by Bluerobin on Dec 11, 2014 14:53:30 GMT -5
Ombud, Whole life, and some annuities. In my case, I have used "single premium" whole life and annuities. They seemed to appreciate faster. Don't think that you can cash them out next year and get all you paid in. Given a few years, they will do ok.
ETA: Depending on how long it has been in effect, you may not get the full value of what you put in.
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