son CD investment
I have $56000.00 CD that I started for my son when he was two. He is now 42, working, married has
a house and he knows about this CD. Its a custodial account with my name and his as beneficiary under my social security. He does not have any children. What can I do to invest this CD so he has something in his old age. Any advice is very appreciated.
Terry Says
Well, because it is under YOUR SS number, it is technically your money. And I assume you have been declaring the annual interest on your own tax return.
So treat this as a gift to him –IF you are going to turn it over to him completely. Then if he is working, he can put $6,000 a year into a Roth IRA (still time to make a contribution for 2021 and now for 2022) and open a Roth account at Fidelity or Vanguard and choose a fund.
Is he capable of making his own investment decisions? If so, just give him a check when the CD matures and let him make his own decisions on how to use/invest it. Maybe he wants to pay off his mortgage — or give his wife a diamond!!
If you want to maintain control, then when the CD matures, open a JOINT account (with rights of survivorship) in your two names, at a place like Fidelity, and you can make the investment decisions.
Don’t worry about taxes. You can give away more than $11 million in your lifetime without any impact on estate taxes!
