LexION Blog

What You Should Know About Giving Stocks as Graduation Gifts

With graduation season in full swing, you may be considering giving a graduate stocks or another investment. If you haven’t considered this yet, you should; it’s a wise gift that can repay your favorite graduate for years to come,  and can also encourage good investment habits and teach them the power of investing.

If you’re considering this, here’s what you should know about giving stocks as graduation gifts:

Follow up with advice

Although you don’t want to be a “helicopter investor”, you can make giving stocks as graduation gifts more powerful by encouraging a long-term investment perspective. By teaching the recipient that their investments will be able to grow over time and harness the power of compound interest, you’ll be encouraging them to growth their wealth by investing wisely.

Financial gifting limits

If you plan to give over $14,000 to one person – investments or otherwise – a gift-giving tax applies. Your tax and financial advisors can help you understand the implications and necessary paperwork for your planned charitable and individual gifts. The IRS also provides additional information on gift tax, exclusions, and required forms.

Consider retirement funds

Although retirement may seem light years away for a recent graduate, you can help them avoid the pitfall facing millions of Americans who are under-prepared for retirement. Tax-advantaged retirement investments (like a Roth IRA or 401(k)), can harness the power of tax-free growth to create a great investment value for retirement.

A Roth IRA is a great option to consider. The money contributed to a Roth IRA is taxed initially, and then it can grow tax-free and be withdrawn without taxes during retirement.

Want to learn more?

Do you want more information and would you like to see how a fiduciary wealth manager can help you with decisions like this? Contact us today.

No Comments

Post A Comment