Best Financial Investment Gifts

Best Financial Investment Gifts

Updated on Dec 10 2018


Holiday gifts can mean so much more than a gift that lasts for a moment in time. Instead of giving a normal gift, such as a gift card or stocking stuffer, give a gift of greater spending power; a financial gift, such as a stock, bond or education plan that will last for a lifetime. Here are the best financial investment gifts to consider gifting this holiday season.

‘Tis the season for giving. It is time to gift your children, grandchildren and parents a present that will have a longer-lasting impact on their lives. Here are some unconventional gift ideas you might want to consider as alternative to the normal holiday gift-giving ideas.

Top Financial Holiday Gift-Giving Ideas

According to IRS Guidelines on gift exclusions, you and your spouse can give up to $15,000 per person to as many people as you’d like, without paying gift tax. If you want to give more, you can, but that amount would cut into the $5.6 million ($11.2 million per couple) you’re allowed to give away without paying gift or estate taxes during your lifetime, or at death. You’ll also have to file a gift tax return for the year in which you make the gift if you exceed the $15,000 amount.

Gift of College Funds

College funds offer tax advantages and a great alternative to the usual gift-giving ideas. If you gift every year for birthdays and holidays, that amount can add up to a significant amount once your child or grandchild reaches college age. The gift of college funds is truly one of the most useful and pragmatic gifts. Your loved ones will be very appreciate once it comes time to pay the hefty college tuition costs.

529 Plans – The 529 plans offer a lot of federal and state tax advantages, which allow you to either purchase prepaid plans to trade in for college tuition or open a college savings plan to tie with an investment portfolio. Both 529 plans offer tax-free growth to be used throughout the student’s college tenure. These plans typically come with high contribution limits based on states.

Overall, there are incentives for family members who invest in large bundles. Make sure to do research and consult a financial expert about how to maximize state tax incentives before buying.

Coverdell Education Savings Account (ESA) – The ESA is a trust or custodial account designed to help families to help pay for education and tuition. Like 529 savings plan, ESA offers tax-free earnings growth and tax-free withdrawals on qualified expenses. The difference is that the Coverall ESA can be used in a broad range of K-12 expenses.

Gift of IRAs

When your children or grandchildren start earning income, you can help them open a Roth IRA. This type of account doesn’t tax investment growth each year. Withdrawals after about the age 59 1/2 from accounts at least five years old are tax-free, according to the IRS.

Gift of Stocks and Bonds

Purchasing stocks and bonds can be a valuable teaching opportunity to help your family learn about the financial marketplace. By giving the gift of stocks and bonds, you have the opportunity to share an engaging financial experience by watching how the value of the stocks and bonds fluctuate over time with your loved one. You can also discuss why certain stocks were purchased, and the advantages and disadvantages of both types of investments. Stock and/or bond gifts helps you help educate the next generation/s to become investors, instead of just savers.

Give the Gift of Life Insurance

One of the biggest benefits that comes from buying life insurance for children is that you can help protect their insurability from life-threatening illness, or other unforessen events. It is considered to be an investment for the child, their family, and their financial future which can be used for various situations. Life insurance is worth researching and weighing both the pros and cons for the individual child’s needs and situation.

Another way to provide the benefits of life insurance to your loved ones of any age is to add them as your beneficiary on your life insurance, to help cover healthcare and funeral costs that are typically overwhelming for loved ones. Long-term care insurance is also a great gift that gives peace of mind.

Gift of Trust

A trust fund is best for people moving large sums of money. Trust allow people to give any asset to their children and grandchildren. Trusts can be set up at any time, there is no age limit. This gift gives you the power to dictate how and when the wealth is distributed. This can reduce estate taxes and

Gift of Financial Advisor Expertise

Give the gift of peace of mind, contribute to your own retirement savings, or to a loved ones, to give a financial gift with many returns.

Consider connecting with an expert financial advisor for help getting financial affairs in order. A good financial gift will last a lifetime to set your loved one up for a brighter financial future.

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