Hi ladies. My son just turned 6 this June. He recently won a settlement of $12,000. The courts say it needs to go into a restricted account until he turns 18. The lawyer says to call around and see which banks offer the best rates. Does anyone know the best thing to do here. I think it can go into college accounts too. I just want it to grow substantially so he can use it for college. Any ideas???
I say put into a 529 account. Save it for is college years. Then whenever you can keep building it up. College tution is on the rise.
talk to a financial planner. Investment firms. Some could be put in an educational plan, and some into investments or stocks that could grow and complement the educational one, ultimately. Either way the $ is secure for the future.
First of all, check out the Michigan College Fund - they have a matching gift from the state. It has certain requirements and you will have to see if you qualify, but if you do qualify, it is like free money! If you do not qualify, we were advised to open a Capstone account for our boys and I can't remember all of the benefits, but it accrues more interest than a CD, savings account, or the state tuition funds. If you are interested, e-mail me back and I will find out more of the information or put you in contact with someone who can explain it better (to be honest, I don't understand a lot of the investment options and reasons, but I do know that we were advised to put our son's money for college into one of these accounts.) Good luck!
Hi D.,
My background is in Nutrition and not Finance but I would say put it in a CD in his and your name (call around for the best interest rates-the longer the term the bigger the return)...interesting
Michigan's 529 plan is wonderful. Up to $10,000 investment per year (you or he-I am not sure how that would work) is state tax free. After that, when the proceeds are used for college, the capital gains are tax free, too. www.misaves.com. Really easy to set up an account, and you can put it in an age based fund, so the investments become more conservative as he gets older. It can lose money, however.
Hi D.... Let me suggest a Roth account for your child. The Roth accounts accumulate interest at a good rate and all of the money earned in the account is tax free. Meaning if you put in $12,000 and when your child is 18 let's say it's worth $48,000 he gets to use the entire $48,000 and not have to claim it for taxes. Go to your local bank or credit union and inquire. I believe they have Roth college funds and also IRA accounts. They IRA's work the same way. Roth accounts are the governments answer to the social security problem. You deposit money that has already been taxed and you don't pay taxes on ANY interest that it earns.
Hope this helps... Sincerely, E.
I am not sure if it is possible for a six year old to have a Roth IRA, but if it is, you could possibly ask your accountant or financial advisor about using this money to buy real estate. There are many properties out there that would give him a good return on his money. It is a self-directed IRA. This might be a great option. You would have to do a little research, but it might be well worth it in this economy. let me know if you would like to talk more about it.
Not a finance major, either but United Credit Union currently has a 6.01% checking acct. No minimum balance or monthly fees. It's a good return rate.
My nieces won a settlement as toddlers for a dogbite...they got the money when they turned 18. I don't know if it earned interest or not.
I'm not sure where you are located. But contact Sam Pelligrino at State Farm. His address is: 25755 Goddard, PO Box 819, Taylor, Mi 48180. His phone number is:
###-###-####. There are a few different options to consider, and he could help you decide the best one. Tell him that Scott and L. recommended that you see him. The whole office is made up of very nice people, any of them would be willing to sit down and talk with you.
Contact Bank of America, they're really great. Also, look into CDs. Good luck
A bank is not going to give you a rate of return that will even, after fees, keep up with inflation. The best vehicle is probably a Roth IRA or a money market account, but you need to speak to a licensed securities agent in your area. Where do you live? Most securities firms will not take clients with less than $75,000-100,00 to invest. However Primerica Financial Services specializes in helping middle income Americans make these kinds of financial decisions. If you would like to contact me I can put you in touch with an agent in your area.
Blessings,
T.
I am an attorney and this is something your attorney should be helping you with. Any settlement for a minor over $5000 must be approved by the court and a conservator (that can be you) must be appointed by the probate court. I'm not sure whether it can be put into a 529 account or not...but seriously, your attorney should be able to give you better direction than "call around to banks".
D.,
I would suggest a 529 education account for your child. The account will grow tax deferred while invested, you will remain in control of the account, and the funds can then be used for college. I am a financial advisor for Ameriprise Financial in Shelby Township. I have been an advisor for over 15 years. If you would like to contact me for more information, please feel free to call me at ###-###-####. Best wishes, V. Pozsgay.
D.; most banks can give you an account till 18 this is a very good idea, it can collect interest and become bigger by the time he is 18 , when each of my kids were born their grandpa started a bank account for them with like 50 dollars in it, they cannot touch it till 18 , it worked very well with my kids, they got some interest on it, and had more later, but with 12,000 you should be able to get some good interest, if you divide it up you wont collect interest, just do what you can, D. s
Banks are not yielding much in interest these days. Contact a financial planner and see what is said. Also try MET for the college fund. I do not know anything about it for I never did it with my kids. We had no extra money when they were growing up.
