The Planning Corner: Investing and Saving for Minor Children
Mar 13 2026 | Back to Blog List
VIDEO TRANSCRIPT:
David Ernst: Hi everyone, I'm David Ernst, partner at Cedar Point Capital Partners, and I'm joined by Nick Timm, our director of financial planning, to talk about ways to invest for minor children.
Nick, when families ask what's the best way to invest for a child, what are the account types that we walk through?
Nicholas Timm: We're usually talking about three different types of accounts: a 529 Plan, a custodial UTMA, or the Trump account. Each have their own benefits.
David: Let's start with 529 accounts, talk about those.
Nick: So, 529 contributions will typically receive a state tax deduction. It'll grow tax deferred and if it's used for a qualified education expense, it comes out tax free.
David: And what about Uniform Transfer to Minor Accounts, or UTMAs—describe those.
Nick: Those offer a little bit more flexibility. You can invest the money for a long-term goal for the child—maybe it's for school, maybe it's for a car, maybe a house down payment. The caveat there is, once they reach the age of majority set by the state, it's controlled by the child at that point.
David: And in Iowa, that's age 21.
Nick: Exactly.
David: Next are Trump accounts. Talk about those.
Nick: Those are a little bit more like retirement style accounts, where contributions receive tax benefits. They're really for the long-term benefits. You give up some flexibility for longer-term compounding and tax benefits there.
David: So, for education, 529 accounts. For flexibility, maybe UTMAs. And for the longer-term, Trump accounts.
Nick: Yeah, and we didn't really talk about this, but if your child has a job in high school or something like that, they may have the ability to save into a custodial Roth IRA as well.
David: Thanks, Nick. For many families, it isn't necessarily the right account, but the right mix over time. If you'd like help determining which approach is best for you, reach out and let's start a conversation.
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