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Strategies & Market Trends : Dividend investing for retirement
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To: Steve Felix who wrote (17693)12/2/2013 4:56:40 AM
From: chowder  Read Replies (1) of 34328
 
I went with UGTM with both of my kids. The income from these accounts never amounted to enough to generate a tax problem. It takes a lot of dividend income to overcome their general write-offs before they hit the tax threshold.

My son's portfolio is now over $109K, with $76K in a taxable account and he still gets a tax refund every year.

Tax concerns with a UGTM portfolio are overblown when all you're putting into them is $5K per year.

Now if you plan on trading within the account, that might be different.

The age feature where the money is their's at age 18 means nothing if they don't know they have that control. I never told my kids they had the ability to spend that money. I simply told them I had money put aside for them and it wasn't for their casual spending or for their everyday expenses or wants and needs.

An 18 year old isn't savvy enough to know they have control over a brokerage account unless we enable them by providing that information.

My son was 26 years old and got permission to take out money to pay cash for a car. My daughter was 21 and asked if she could withdraw cash for her 3 month stay in Spain.

They can't get what they don't know they can get. Neither of my kids know the account ID's or passwords. They know what's in the account and I provide monthly performance updates. My son's portfolio is posted publicly so he can access it 365/24.

Ground rules were established! They know what the accounts are for and it ain't for their casual spending. ... Ha!
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