Building Wealth for Kids: Accounts Every Parent Should Know

In this episode, Andrew Barnhardt and Brett Herron explore various strategies for saving for children’s futures — whether it’s for education, retirement, or general financial support. They break down the pros and cons of different account types, including 529 plans, custodial Roth IRAs, UTMAs/UGMAs, and saving in a parent’s name. Listeners will gain a clear understanding of how to align financial tools with their goals and ensure they’re setting up the next generation for success — without putting their own financial health at risk.

Tune into this episode to also learn:

• The tax benefits and flexibility of 529 college savings plans.
• How custodial Roth IRAs can jumpstart retirement savings for teens with earned income.
• Why UTMAs and UGMAs offer flexibility — but come with tax and control trade-offs.
• When it may be better to save in your own name instead of your child’s.

What we discussed

• [00:00:31] Why saving for kids must come after securing your own financial foundation.
• [00:02:35] Pros, cons, and new rules around 529 college savings plans.
• [00:06:55] How custodial Roth IRAs work — and why earned income is required.
• [00:11:04] The flexibility and limitations of UTMAs/UGMAs for broader financial goals.
• [00:14:59] Saving in your own name: flexibility, control, and important tax considerations.
• [00:20:07] Why segmenting investment “sleeves” can help avoid misusing funds.
• [00:22:07] A quick mention of upcoming TRUMP accounts and what to expect.

3 Things To Remember

1. Saving for your children is important, but make sure your own financial house is in order first.
2. Each account — 529, custodial Roth, UTMA/UGMA, or personal savings — has unique pros and cons.
3. Teaching your child about money can be just as valuable as saving money for them.

Memorable moments:

(00:01:58) “You want to make sure your own financial house is in order so that you don’t one day ever become a burden on your kids.”

(00:06:33) “There’s added flexibility now with 529s where you can actually convert a portion of these into Roth IRAs for your kids.”

(00:18:27) “Most financial advisors could give you horror stories of parents who set up custodial accounts, and the kid wasn’t ready to handle the money.”

Useful Links

Connect with Andrew Barnhardt: abarnhardt@hfmadvisors.com | LinkedIn

Connect with Brett Herron: bherron@hfmadvisors.com | LinkedIn

102 WEST HIGH STREET, SUITE 200

GLASSBORO, NJ 08028

HFM Investment Advisors, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. All investments involve risk and are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as a recommendation appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.