Retirement Plans for Kids

Saving for a child's future is an important thing to do. People fund educational funds all the time. These are great if the child goes to college. Not so great if the child is fortunate enough to get a free ride. Trust funds are great too. However, once the trust fund matures the new adult could possibly waste the trust fund. However, saving for a child's retirement makes sense. Everyone strives for that day when they are fortunate enough to retire. Imagine having funds building up 10, 15 years before the child even enters the workforce.

My Experience:

My parents set one up for my daughter. My daughter hasn't even turned four yet but she has a couple of thousand dollars tucked away earning interest for her retirement over 60 years away. Obviously educational funds and trust funds do make sense. I have a small savings account for her which I plan to convert to one of those when the savings account grows a bit.

Benefits for my Daughter:

When she enters the workforce she will already have funds working towards her retirement. She will have a head start on her retirement goals. She will be able to add to her retirement as she works and programs are offered to her. She will have a head start compared to her parents and grandparents. Target2025.com states the upside is kids will reach financial independence quicker, by investing in their future you are teaching them, and helping to secure their future.

Benefits for Me:

I can share with my parents the peace of mind that my daughter has a head start towards retirement. It could be an avenue for me to contribute tax deductible contributions. It could also free me up to invest in a trust fund or educational fund for my daughter.

Retirement planning for children is often forgotten about with other savings and expenses. However, saving for a child's retirement does make sense and could help your child achieve a comfortable and enjoyable retirement.

Safe Guards:

Her retirements are administered by someone bedsides me. My daughter has the security her funds will be safe. Her funds won't be touched no matter what kind of financial emergency comes up. Her savings account is set up in another town which I only visit about once a month. Again there are fewer chances of withdrawals and more chances of the accounts growing.

More from this Contributor:
When Does a For-Profit Degree Make Sense?
How to Plan Your Retirement on a Single Salary
Payroll Deduction Programs: The Easy Way to Give

Sources:

Target2025.com

First hand experience