The Enduring Gift

Jill Ciccarelli Rapps  |  Life in Naples Magazine

Don’t spoil your children and grandchildren, help them on their way to financial security with a gift that will last a lifetime and beyond.

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?