We have an investment UTMA for our 5yo that we fund $100/m

Tiggity®

Ultimate Clemson Legend [103345]

TigerPulse: 100%

Posts: 67878

Joined: 2002

Here's what wife and I did. I don't do financial advice. So fwiw....

Dec 10, 2024, 11:21 AM

When we graduated from college, we both got jobs and all that good stuff. I set up an IRA, she set up a 401k. But those first few years we set aside a regular savings account (quick/emergency access) then a short-term CD. Into those emergency accounts we poured our money the first 2 years, until we had a good 8 months of emergency savings to access, then switched to pouring most into the IRA/401K's.

As time went on we obviously raised the emergency account to match expenses, while pouring everything else into the other accounts like the 401K and retirement. But I wouldn't think one of those bank CD's or savings accounts would be good for retirement, but they're good for accessible savings. I'd build that up first, as at his age, if he gets a decent job, and keeps expenses low, he can spend a year or so building emergency savings, without harming his long-term retirement savings.

We basically saved first for emergencies, and then even more for retirement. Too many people our age today have massive 401K and retirement savings, but can't afford a $20K medical bill. I think that 1-2 years of concentrating on emergency savings actually helped us budget and ultimately allow more retirement to build. At his age, some emergency savings should be a priority, and hopefully in just a year or two he can really start building the retirement part.

Saving is important, but you have to do it both ways. Don't end up in a bad spot being retirement rich and life events/unexpected events poor.

PS. Wife and I both had CD's from our grandparents we cashed out to put a down payment on our first house. So we were motivated to replenish that before diving into retirement saving. Best tip, live poor for at least 5 years. Even as your income grows, keep those expenses down, early on. It will pay dividends later on.

flag link

military_tech

thumb_down

thumb_up

Lunge money nerds: GITT with your suggestions for an account for a youngin.

Schwab Roth IRA - buy some Bitcoin ETFs***

Roth IRA for sure

Stock markets are not high risk right now. We are about to have a very business

It's just plain dumb to put $1000 in a retirement account

This is a great idea

We done good, I think, to get him through college with no student loan debt.

I think you've got to separate the two desires.

Yes, he's gainfully employed and already has some savings. He should be hired

You need another son?

Re: You need another son?

That is pretty great. I'd lean heavy towards the IRA part.

High yield savings account allows you to take money out fast and without

Oh, another thought. If you can find an add on CD that will allow it to grow

Aren't CD's at like 2% right now?***

4 to 4.75 at our credit union, but 5K minimum.***

Get em lots of that Hawk Tuah coin.***

Re: Get em lots of that Hawk Tuah coin.***

My opinion...

The more coins he gets the more hawk tua he gets

FYI on 529. Recipient can roll over to Roth IRA once 529 is 15 yrs or older.

This is how you set up a kid for box seats at the ACC championship***

Or, you know...

Here's what wife and I did. I don't do financial advice. So fwiw....

I agree with others that you seem to have two different goals here.

He's not particularly sophisticated financially. He's good about being frugal

I mean......the proper approach

Deposite $1k into Mybookie account

Re: Deposite $1k into Mybookie account

Remember,

Buy him some BitCoins ... put them in a protective sleeve so they don't get

Re: Buy him some BitCoins ... put them in a protective sleeve so they don't get

I'd go with a vanguard account, maybe put money in VTSAX

Re: Lunge money nerds: GITT with your suggestions for an account for a youngin.

TigerBoard POTD