UTMA Investing

I’m attempting to open a UTMA for my 2 year old daughter and had a question.

I do not know if this question makes sense but does it matter which ticker should be used for a target index fund for a UTMA?

For example, if I decide to invest in VFFVX (retirement year 2055 ), but my daughter will be 18 in 2040 and she’ll have access to the money 15 years before the retirement year, Does that mean, I shouldn’t choose this ticker?

Hi Alysia,

The TDIF year has nothing to do with when the money can be taken out, but rather the asset allocation. Your 2 year old daughter’s appropriate TDIF year for 2085 probably won’t exist until she turns 18. So for now you can choose VLXVX (2065) until the 2085 TDIF is created. The asset allocation for a TDIF remains the same for the first 20 years!

1 Like