From Yahoo Finance: 2025-05-11 08:04:00

A new survey from Allianz Life reveals that 64% of Americans fear running out of money in retirement more than they fear dying. To alleviate this fear for future generations, consider helping your kids save for retirement now rather than later.

By helping your kids save for retirement today, they can benefit from compound interest and accumulate more wealth. Consider opening a savings account or a high-yield savings account to earn meaningful interest and start their retirement savings journey.

Custodial accounts, such as UTMA or UGMA, are another great option to help kids save for retirement. You can invest in stocks, bonds, or mutual funds on their behalf, but keep in mind that the account is owned by your child, and they will have sole access once they reach a certain age.

Contributions to a custodial account are considered gifts, so be aware of gift tax implications. Contributions under $19,000 (single) or $38,000 (married filing jointly) are exempt from paying a gift tax until 2025.

Consider using a Roth IRA to help your kids save for retirement, where contributions are taxed today but withdrawals are tax-free during retirement. Your child will need earned income to contribute, which includes income from non-traditional sources like babysitting or lawn mowing. Remember, contributions cannot exceed your child’s earned income.



Read more at Yahoo Finance: 3 Ways Your Kids Can Start Saving for Retirement Now