Best type of account to gift adult children

My adult kids are graduating this year & I would like to gift them with investment accounts. Since they’re still currently unemployed was wondering which type of account is best to start them on or can start for them or should I wait till they’re done with school & have jobs to open Roth IRAs for them? I’m late to investing myself & after taking this class I now know better and would like for my kids to get going on investing. Thanks!!

Hi @Chrissy!

Thank you for the question!! I have three thoughts:

  1. as you know from the course, make sure you take care of your own personal finances first. Helping your kids is very generous and should probably only happen if you don’t have any high interest debt, you’re maxing out your own retirement accounts, etc. Sometimes the best thing a parent can do is to encourage them to save and build wealth on their own!

  2. I would think about what you want to help them with specifically. If it is to eventually buy a house for example, you could consider keeping the money in your own name and let it grow until they are ready to purchase a house. That’s just an example. But, keep in mind once the money is in their name they can do with it what they like.

  3. If you do decide to open a Roth IRA for them, they will need to have earned income of at least the amount that you contribute.

I hope this is helpful! Let us know if you have any other questions!