Contribute to a 529 plan.
College is expensive, and there is no better way to help offset the cost than with a 529 plan. Grandparents can establish the plan and remain the owner until the child is ready to go to school. If your grandchild does not need the funds or you need your money back, you can reclaim it (with some penalty).
Pay student loans or tuition directly.
If the child's parents are struggling to pay for college, offering to pay student loans or tuition is a great way to contribute financially. Funds can be sent directly to your grandchild's school which eliminates all of the extra paper work and opening of additional accounts.
Name grandchildren as life insurance beneficiaries.
If your grandchild is already dependent on you financially, consider naming them as a beneficiary on your life insurance to help them become financially secure in the future. Buying permanent life insurance is one way to pass money on to them tax free. Grandparents can also set up an insurance trust for proceeds rather than naming their grandchildren as direct beneficiaries.
Contribute to retirement plans.
As soon as your grandchild is old enough to get a summer job, they can start contributing to a retirement account. Help them jumpstart this account is by contributing for them, funding an IRA, or matching any contributions your grandchild makes. You can even set up a custodial IRA or Roth IRA that you control. A ROTH IRA is a great option because initial contributions are taxed, but returns are not.
No matter how you decide to contribute to your grandchild's financial future, a Telhio Financial Advisor is always available to help you find the best option for your family. Stop by your local branch or contact us to speak with a representative today!
Related Articles:
How To Get Discounts and Savings Just By Being a Student
The Science of Saving: Blame it on the Brain
