The 4 Best Gifts To Increase Financial Security

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No matter how well intentioned, gift-giving is often a financial burden on the giver that then burdens the recipient with the obligation to reciprocate — but what if you could give the gift of financial security and peace of mind? You can.

The following gift ideas can shore up a loved one’s financial future while giving you the satisfaction of knowing you gave the most practical present imaginable — a big step on the path to stability and wealth building.

A Session With a Financial Advisor

For many, the biggest hurdle to financial success is knowing where to start and what to do first. Building savings, planning for taxes, reducing spending, budgeting, investing and debt elimination can feel overwhelming — but a single hour with a professional can illuminate a path to financial wellness. 

According to Wealthtender, a marketplace for financial professionals, the average advisor charges between $150 and $400 per hour — and that hour might just be the most productive gift you can give.

A Roth IRA 

Roth IRAs are after-tax retirement accounts that are far more flexible than pretax accounts like traditional IRAs and 401(k)s because the money grows tax-free and qualified withdrawals are also exempt from tax. Additionally, contributions — but not investment gains — can be withdrawn at any age without tax or penalty. 

Unless they’re a minor child or a spouse, the recipient will have to open the account and sign for it — provided they meet all qualifying criteria — but your gift can fund a new Roth IRA and begin the process of time-based compounding, no matter how much or little you have to invest. If the recipient already has one, many custodians allow third parties to deposit gifted contributions directly, according to Fidelity and TIAA. 

A 529 Plan Contribution

Whether for a child or a parent doing the expensive work of raising one, a contribution to a college fund can be a gift that keeps on giving well past graduation — and 529 plans are the gold standard. 

According to the IRS, these tax-advantaged investment accounts are designed to help parents and others save for their children’s education from an early age — but anyone can open one for any beneficiary or gift contributions to an existing 529.

No matter which you choose, your contributions will grow tax-deferred and withdrawals for qualified expenses — tuition, supplies, books, room and board, etc. — are exempt from both state and federal taxation when the child grows into a learning adult.

Treasury Savings Bonds

Series EE and Series I savings bonds are among the safest ways to save — and the Treasury Department allows both to be given as gifts. 

• Series EE: These bonds pay a fixed interest rate and are guaranteed to double in value in 20 years, even if the Treasury has to add more money to make up the difference.
• Series I: These bonds pay a fixed rate and a variable rate that’s tied to inflation to protect purchasing power, with the rate adjusted every six months.

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