Saving / Investing for Grandkids

[Fishindude77]

We have two young grand children that we would like to get something going for to help them out when they get to adulthood; college, house, wedding, continue saving, etc.

Wondering who has done this sort of thing and what recommendations you might have?

[TexasHusker]

Ordinarily, I am not a fan of mutual funds. But...for a newborn and the time that they have, it's not a bad way to go.

You could essentially fully fund their retirement for a one-time $10,000 gift, invested in a decent mutual fund.

Assuming you use the rule of 72, and assuming that they retire at 72, that money is going to double a staggering 9 times if it only yields 8 percent annually, on average.

That's $2,560,000 when they reach 72.

What better gift could you possibly give?

Thanks Gramps!

[Petunia 100]

Ordinarily, I am not a fan of mutual funds. But...for a newborn and the time that they have, it's not a bad way to go.

You could essentially fully fund their retirement for a one-time $10,000 gift, invested in a decent mutual fund.

Assuming you use the rule of 72, and assuming that they retire at 72, that money is going to double a staggering 9 times if it only yields 8 percent annually, on average.

That's $2,560,000 when they reach 72.

What better gift could you possibly give?

Thanks Gramps!

That's 8 times. If it doubles a 9th time, that's 5,120,000. Thanks Gramps, indeed!

[AJ444]

A grandparent owned 529 plan can be beneficial but you really need to research the tax implications in your state:

http://money.usnews.com/money/personal-finance/mutual-funds/articles/2015/09/08/grandparents-dont-make-a-529-plan-mistake