by Jill Ciccarelli Rapps, CFP®
A newborn baby may not be able to read the financial journals, but you can give them a head start by opening a savings account with a small gift or an education account that may be tax deferred and tax free for their education. By adding just $100 per month at a hypothetical return of 6 percent, at age twenty it would be worth $45,665 and at age fifty it would be worth $359,725. Supplement this gift with something tangible like a multi- purpose “piggy bank” where a young child can learn good financial habits early.
They will have fun deciding where to save their change – towards their education, savings, charity, or fun! Why shouldn’t every newborn be given this opportunity?
As children start to earn wages, a Roth IRA account is a fabulous idea to start building savings for their future. With a Roth account, up to $5,000 or all earnings, whichever is
the least amount, can be deposited each year. A great idea is to match whatever they can save into their accounts. At this age, they should participate in their investments; pay them to do research, read selective books, and write reports on financial subjects you think are important for them to know.
The key at this age is encouraging them to “pay themselves first” – to save a portion of every dollar that comes their way.
For children who are 40 and over, it is not too late! Consider paying for a gift of a financial checkup – this will allow them to work with a financial planner who will help them put the necessary planning in place today and for their future. It is a great way to keep their privacy, while feeling comfortable they are getting the right guidance. At this age, make gifts with a purpose, like setting aside savings for a health care account, paying for a long-term care policy or setting up an account that can supplement their retirement.
Speak with your advisor to decide what kind of gifts can have the most significant impact on each of your family members.
The holidays are around the corner; why not make a gift to last a lifetime and beyond to your children and your grandchildren today?
Jill Ciccarelli Rapps
Jill Ciccarelli Rapps, is a certified financial planner and a trained life coach and is a Partner of Ciccarelli Advisory Services Inc., a Family Focused Wealth Management Firm
in Florida and New York. Ciccarelli Advisory Services, Inc. is located at 9601 Tamiami Trail North, Naples, FL (239-262-6577)
Investment advisory services offered through Ciccarelli Advisory Services, Inc., a registered investment adviser independent of FSC Securities Corporation. Securities and additional investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment adviser.
The views expressed in this article may not reflect the views of FSC Securities Corporation. This information is not intended to be a substitute for specific individualized tax,
legal or investment planning advice.