3 things you can do in 2021 to set your kid up to become a millionaire

The video tutorial discusses strategies for building wealth through tax-advantaged accounts. It covers opening a 529 plan to save for a child's education, highlighting its tax benefits and contribution limits. The tutorial also explains how children with earned income can start a Roth IRA for tax-free retirement savings. Additionally, it introduces custodial accounts for investing in fractional stocks, teaching kids about financial management. These methods aim to reduce future debt and encourage early savings, providing a financial head start for children.

What is a key benefit of a 529 plan?

• It can be used for any type of expense.

• It allows for unlimited contributions.

• Withdrawals for educational expenses are tax-free.

• Contributions are federally tax-deductible.

What happens if you contribute more than $15,000 to a 529 plan in a year?

• You may need to file extra tax paperwork.

• The excess amount is automatically returned.

• You receive a tax refund.

• The contribution becomes tax-deductible.

What is the term used for investing five years' worth of gift limits in a 529 plan?

• Ultra funding

• Super funding

• Hyper funding

• Mega funding

What is a benefit of a Roth IRA for children?

• Withdrawals are taxed at a lower rate.

• Savings can grow tax-free over decades.

• Contributions are tax-deductible.

• It requires no earned income to open.

How can custodial accounts help children learn about investing?

• By requiring no parental involvement.

• By offering tax-free withdrawals.

• By providing them with a fixed interest rate.

• By allowing them to trade fractional stocks with parental approval.