If you are a parent, you likely have concerns about your child’s financial future – and, for good reason. 83 percent of Americans can’t afford to pay for college, and when it comes to earning potential, the Millennial generation is currently earning 20 percent less than Boomers did. Given this trend, it’s likely that subsequent generations will face even more difficulty securing a college education and, afterward, a well-paying job.
It never hurts to be prepared for the future, particularly when it comes to finances. So, here are a few tips that will help you, as a parent, invest in your child’s financial well-being.
Open an Education Savings Account
Not sure how you’ll pay for your child’s college education? Take one big step toward educational security and peace of mind with an Education Savings Account, or ESA. These plans allow you to deposit up to $2,000 annually towards your child’s future college tuition. ESAs allow your funds to grow tax-deferred. Plus, if you’re concerned about paying for elementary or secondary school costs – like a private school education – you can use ESAs for this type of schooling, too.
Update Your Will and Beneficiary Information
No one likes to imagine that their life will be cut short suddenly, but many Americans live their lives with no will in place, which can jeopardize the well-being of your child if you pass unexpectedly. No matter how healthy you are, prepare a will naming their right to your assets. While you’re at it, update other beneficiary information on your life insurance policy, bank, and retirement accounts. The information on your beneficiary designation form will override your will, so it’s important to keep this updated.
Contribute to a Retirement Fund
Did you know that the average Social Security benefit is just over $1,000 per month? For many older adults, this simply won’t be enough to live off comfortably. So, secure your future, as well as the financial well-being of your children, by contributing to a retirement fund. Let’s face it: many children worry about one day providing for their elderly parents. By eliminating this concern, you’ll allow your child more financial freedom and the ability to provide for their future children and families.
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