Posts Tagged ‘parenting’
If you are, or have been a parent, go see this movie when it plays in your area. Long, and a bit slow at the outset, it grows, like its characters, into a remarkable and honest portrayal of a family growing up.
Q: Other than 529 accounts, are there any other investment vehicles I should be considering to help take care of my children in the future?
Assuming you are on track with your own retirement funding needs, then a 529 plan, Coverdell education Savings account, or even a Roth IRA is a great way to help fund a younger child’s college education. All have broadly similar tax-free benefits with the major differences that 529 plans have a $14,000 (2013) annual tax-free funding limit while the Coverdell is fixed at an annual funding limit of $2,000. A custodial Roth IRA in the younger child’s name may be used to fund education expenses but contributions are limited to the amount of the minor child’s earned income, or $5,000 per year, whichever is less.
Once your retirement is secure and you have fully funded the projected costs of college, it may be time to talk to an estate planning attorney to discuss the options suited to your situation. Any individual can make gifts, tax free, of up to $14,000 per year (2013) to anyone, including a minor or adult child. For children under the age of 18, custodial Gifts to Minors accounts (UGMA or UTMA) are a wealth transfer vehicle often employed by parents and relatives. I caution parents about these accounts because the child gains full control of the account generally between the ages of 18-21, depending on your state’s laws. Once the full owner, the now-adult child is free to use the funds as he or she pleases, and is under no obligation to use the funds for college or any other purpose intended by the original contributors. There is also a gift tax exemption for an unlimited amount of college education or medical expenses paid on behalf of any third party. But you must make the payments yourself directly to the college or medical provider to qualify for the exemption.
The last big ticket item that clients consider is helping a child purchase a home. A great idea as this provides them with a steady roof over their heads, can help their credit and gives them some equity of their own. The usual caveats apply regarding making sure your own needs are taken care of first, with the addition of some major cautions around gift tax, credit and ownership issues that are too complex for this short article. If considering this option, consult with your tax advisor and/or attorney first.
A version of this answer was originally published at Nerdwallet
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“Don’t worry,” he whispered in her ear during a family outing to the circus, “it’s just a little kitty.”
A recent fad among Russian families, according to this NY Times article, is having your children pose with various wild animals backstage at the circus. There have been the expected incidents yet these have not discouraged families from paying the $15 fee to have their child photographed next to a tiger, or bear. (Economists reading the article may want to discuss how culture clearly affects the utility function.)
Over the course of two weeks, Wardle compared doing nothing with three different strategies. One was simply asking the kids to try the vegetable. In another, the kids were lavishly praised (“Brilliant, you’re a great taster!’’) And in the third, the kids were offered a small reward (a sticker) for their efforts.
The rewards, according to a recent write-up in Psychological Science, enticed kids to try the vegetable more. But the big surprise is that, three months later, the sticker kids were still eating substantially more of it. (The praised kids also ate more, though not as much.) This is a key insight into human behavior: Temporary rewards can bring permanent change.