Here are some milestones to consider as you think through opportunities to help your children financially through different phases of life. I focused on the decades that tend to have more specific milestones, but know that gifting can happen at any point for many other reasons or purposes other than what’s listed here.
Typically this is the beginning of what often can be an expensive couple of decades. These are some of the expenses we see for people during this stage of life:
So what does it mean for you and wanting to help your children through this particular stage of life? Some of it takes some pre-planning on your part. The most important thing to remember is, it must work with your personal financial goals. In other words, be financially aware of how your gifting impacts your financial picture. Then strategize on what makes the most economic sense.
This life stage tends to be far more stable, financially speaking. Typically people are in their peak earning years and can absorb additional costs as they come. These are some of the areas of focus we see for people during this stage of life:
So what should you consider as options for helping during this stage of life? Often, parents opt to do annual cash gifts since the expenses seem to be less specific. Technically each person can gift another person $15,000 per year free of gift tax. Meaning an adult couple could gift a child and their spouse up to $60,000 per year, thus giving your children the flexibility to use or save this as they see fit. Another consideration is opening a grandparent 529 Plan to help with college expenses for your grandchildren.
These milestones are meant to be conversation starters for how and when you want your financial resources to be a factor during your children’s lifetime. There are many considerations you should take into account:
It’s good to have regular check-ins with your financial advisor to help you craft a plan for milestone gifting. There are many different ways to structure gifting, so having a thought-out plan will be important.
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