Funding Your Child's Education and Retirement

Here's exactly how I would use $100,000 to fund my child's entire education and their entire retirement. I'm Tyler, a former financial advisor and portfolio manager. Now I create financial content for free so you don't have to pay for it.

Step 1: Establishing a 529 College Savings Plan

Number one, I would give my own parents, my child's grandparents, $18,000 each this year and next year. I would have them open a 529 college savings plan in my child's name and invest the $72,000 in a low-cost index option. I would recommend opening this plan in Utah or New York, as those are two of the states with the best investment options and potential tax deductions.

Step 2: Encouraging Early Work Experience

Next, when my child is 10, 11, 12, and 13, I would find a way to have them work for my small business. They could help me post my financial content, create thumbnails, or even learn some basic accounting. I would pay them $7,000 a year, which would go into a custodial Roth IRA, invested in low-cost index funds.

Step 3: Projecting Future Value

By the time my child turns 18, they would most likely have a college account worth about $350,000 of tax-free money, as long as it's spent on qualified education. Additionally, without ever needing to touch or contribute to that custodial Roth again, it would become theirs at 18 and would likely be worth about $2.86 million when they are close to retirement—again, 100% tax-free.

Not bad for $100,000.

If any of this is helpful, like and follow, and I'll keep trying to get you one step closer to where you need to be.

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