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Investing for minors - Custodial IRAs and 529 education plans

THIS IS A WORK IN PROGRESS.

Here's a few definitions you will want to know:

  • UGMA/UTMA - Taxable custodial investment accounts for minors. These are not ideal.
  • Roth IRA for Kids - A tax advantaged account. This is no different than your adult Roth IRA, but you open it as a custodian until they turn 18/21. Can be used for educational expenses as well as first time home buying expenses without the 10% early withdrawal penalty.
  • 529 education plan - A tax advantaged account that can only be used for educational purposes and usually is limited in the funds you can invest in.

Where can I open one?


This site contains accounts of my experiences and opinions, and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

I wrote this myself, and it expresses my own opinions. I am not receiving compensation for it. I am not an investment adviser. I may sell any of the stocks or funds named here without notice at any time.