Setting up the next generation
Minh knows that setting his child up for success early in life goes beyond investing in their education or retirement; it means giving his child a head start financially that can create financial security across generations. Together with his wife, they raise their three-year-old child with occasional help from his parents and a nanny while living and working in California.
Minh doesn’t take for granted the help they have with in-home caregiving, as he is aware that their ability to do so is due to financial access and family support, and he considers this when thinking about the kind of future he wants for his child. It’s a future that offers the opportunity to attend college like he did, while also recognizing that as he gets older, there may be financial implications associated with intergenerational caregiving.
Building trust in something new
As a proactive parent who already has a 529 college savings plan for his child and invests in his own retirement, he thinks carefully about choosing savings tools by feeling certain that they align with his family’s long-term goals. So when he heard about the new 530A tax-advantaged investment account, he figured it was worth looking into after learning it’s available to children under 18.
Minh’s decision to open the account but not have it replace his family’s long-term savings plan was influenced not only by the fact that they already have a 529 college savings account they trust, but also that the 530A account was new, which made him skeptical when he first heard about it. A sentiment we have seen mirrored in possible reasons why only 12% of SaverLife parents have signed up for the account. For Minh, however, he took it upon himself to open an account since enrollment was free and offered free money. As months went by, as he waited for instructions to access the account, he thought about the possibilities that financial planning and savings tools could offer his child in the future. He reflected on how the chance to pursue a Master’s and Doctoral degree opened pathways to securing financial support to care for his child, made possible by having a secure financial starting point.
Although Minh sees the value in having access to the 530A, he doesn’t see it replacing the financial plans his family already has; instead, it’s additive. Seeing that the 530A accounts are primarily intended to give children an advantage on their retirement savings, this isn’t where he would choose to save first. He is contributing to his own retirement to make sure his caregiving needs are covered one day, and to his child’s 529 plan, which has been around and is widely known to be useful. He also plans to utilize other investments he feels are a better match for his family before committing solely to the 530A account.
Minh’s main goal is to help his child step into adulthood with a strong foundation by providing a financial head start while also securing his family’s financial future through investing in his own retirement. He sees raising a child as a shared responsibility, one that often depends on support beyond what parents alone can provide. He also knows that as he gets older, those caregiving roles could reverse. By investing in both his own and his child’s financial future, Minh hopes to reduce the financial responsibilities his child may one day have to shoulder. For him, investing in his child’s future is inseparable from building long-term financial security for the whole family.
Minh’s story is part of a larger picture that centers on our members’ experiences with navigating new ways to plan for the future of both their children and family at large. Through understanding our members’ lived experiences and how that shows up in the decisions they make when signing up for new tax-advantage programs, or how affordability affects their day-to-day decisions, we can use these insights as a guiding light to shape broader conversations about future programs that best reflect the needs of the people they are meant to serve.