• How to Build Tax-Free Wealth for Your Kids (Without a Roth or 529)

  • 2024/09/10
  • 再生時間: 8 分
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How to Build Tax-Free Wealth for Your Kids (Without a Roth or 529)

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  • I want you to take a moment to think about how you can generate tax-free wealth for your kids. For most people, two primary vehicles come to mind: the first is a Roth IRA, and the second is a 529 account.

    But here’s the issue—most kids don’t have earned income, so they can’t contribute to a Roth IRA, which takes that option off the table.The second option, a 529 account, can only be used for qualified education expenses. If the funds are used for anything else, the earnings will be subject to ordinary income taxes and a 10% penalty.

    As a financial planner who works closely with families of young children looking to build wealth, I’ve found that most parents want to generate tax-efficient wealth for their kids, but they don’t want to feel limited to education-related expenses.

    Today, I’m going to break down how you can achieve this using a custodial brokerage account. Trust me—you don’t want to miss it!


    Key Topics:

    • Generating Tax-Free Wealth For Your Kids (00:00)
    • Why People Often Ignore UTMA / UGMA Accounts and Understanding Kiddie Tax (01:50)
    • Turning a Custodial Brokerage Account into a Tax-Free Vehicle (03:30)
    • Customizing this Strategy for Your Own Financial Plan (05:03)
    • Money in a Custodial Brokerage Account is Considered an Irrevocable Gift (07:07)



    This Episode is intended to be financial education only and is not intended to be specific tax, legal, or investment advice. Please consult a professional for specific advice.

    Subscribe to our weekly planning insights newsletter: ⁠⁠⁠https://mdrnwealth.com/blog/⁠⁠⁠

    If you need specific advice, you can contact us at Advice@mdrnwealth.com or at: ⁠⁠⁠https://www.mdrnwealth.com⁠⁠

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あらすじ・解説

I want you to take a moment to think about how you can generate tax-free wealth for your kids. For most people, two primary vehicles come to mind: the first is a Roth IRA, and the second is a 529 account.

But here’s the issue—most kids don’t have earned income, so they can’t contribute to a Roth IRA, which takes that option off the table.The second option, a 529 account, can only be used for qualified education expenses. If the funds are used for anything else, the earnings will be subject to ordinary income taxes and a 10% penalty.

As a financial planner who works closely with families of young children looking to build wealth, I’ve found that most parents want to generate tax-efficient wealth for their kids, but they don’t want to feel limited to education-related expenses.

Today, I’m going to break down how you can achieve this using a custodial brokerage account. Trust me—you don’t want to miss it!


Key Topics:

  • Generating Tax-Free Wealth For Your Kids (00:00)
  • Why People Often Ignore UTMA / UGMA Accounts and Understanding Kiddie Tax (01:50)
  • Turning a Custodial Brokerage Account into a Tax-Free Vehicle (03:30)
  • Customizing this Strategy for Your Own Financial Plan (05:03)
  • Money in a Custodial Brokerage Account is Considered an Irrevocable Gift (07:07)



This Episode is intended to be financial education only and is not intended to be specific tax, legal, or investment advice. Please consult a professional for specific advice.

Subscribe to our weekly planning insights newsletter: ⁠⁠⁠https://mdrnwealth.com/blog/⁠⁠⁠

If you need specific advice, you can contact us at Advice@mdrnwealth.com or at: ⁠⁠⁠https://www.mdrnwealth.com⁠⁠

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