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Reply to "Investing inheritance for teens"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]You could open a UTMA for them. They are more flexible than a 529 plan. Depending on where you live, you can manage and control the UTMA until they are 18 or 21. And the first $1300 of annual income in the account is tax-free. If they are teens and work, you could put it into a Roth IRA for them for up to the amount they earned in a tax year (with a cap of $7k per year) - then they get tax free growth plus it is eventually withdrawn tax-free. I have a few friends who do this - they let the kids spend what they earn, but they make a Roth IRA contribution for them up to their earnings or $7k, whichever is lower. [/quote] Don't do this! It counts against them for financial aid. [/quote] How much financial aid do you think a kid would get with $150k in a 529 in their early teens and grandparents rich enough to give $25k per grandchild (plus whatever they gave to their children)?[/quote]
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