(WTNH) — As Tax Day quickly approaches, it may have you thinking about your own financial accounts. If you’re doing some planning for your kids, we are stretching your dollar with some options available to you.
You work to pay the bills in hopes to have enough to put away for your own retirement, all while saving for your children’s future too!
Putting away more and more money is not always easy, which is why the account you choose is so important.
Financial consultant John Caserta said, “There are education accounts…and non-education accounts.”
Wherever you are in life and planning, Caserta said there are options, like accounts designed specifically for their education.
“Think 529 plans; Every state has one. In Connecticut, it’s the Higher Education Trust. Or the CHET plan. You don’t have to use the Connecticut plan, but as a Connecticut resident, you could be eligible for a tax deduction for those contributions.”
Then there are accounts just to save money for their future, whatever that may be.
“Think custodial accounts that are either established under the Uniform Gift to Minors Act, or the Uniform Trust to Minors Act. UGMA…Or UTMA accounts.”
The only catch is many of those will be available in a lump sum when the child turns 21. You want to be sure that’s something you want or choose an account that works better.
He said you also want to talk into account the risk you’re willing to take.
“If it’s a shorter time frame in which you’ll need that money, you typically go be more conservative and use more bonds than you would stocks.”
Whatever you decide, save save save what you can when you can and increase contributions each year if possible.
Ultimately, you can use a combination of stocks and bonds to achieve the right amount of risk.