DEC 13, 2019 · 3 MIN READ
Financial Gifts This Holiday Season
By Matt Cooley, CFP® · Inspire Wealth Partners
’Tis the season to give, so why not think about a gift that keeps on giving and provides a long-term benefit? Here are five ideas to give the gift of money and financial well-being this holiday season:
1. Stock
Buying stock as a gift is a great way to captivate younger generations and start teaching them about the power of compounding and investing. To enhance the interest, consider companies the recipient uses and enjoys — or for a broadly diversified option, a low-cost index fund like Vanguard’s Total World Stock Index (VT).
2. 529 Contribution
With rising costs in education and childcare, 529 plans are a great way to jump-start saving for college or other educational purposes. They receive preferential tax treatment, and anyone — related or not — can contribute; depending on your state, you may be able to deduct all or part of your contribution.
3. Roth IRA Contribution
If the recipient earns income, they can start funding a Roth IRA (and you can help fund it on their behalf). Contributions are limited to the lesser of earned income or $7,000 in 2025. A single $7,000 contribution for a 20-year-old could grow to over $145k by age 65 (assuming a 7% annualized return).
4. One-Hour Planning Session
Most students and young professionals don’t have the complexity to warrant a full-time advisor, but may benefit from a meeting about how much to save, what to invest in, and how to manage debt. A more cost-effective option: gift a personal finance book like I Will Teach You To Be Rich or Simple Wealth, Inevitable Wealth.
5. Charitable Gift in Their Name
Instead of the perfect gift, consider a donation in someone else’s name. For tax purposes, consider donating appreciated stock rather than cash — you may deduct the full market value and owe no capital gains. Check whether your employer offers charitable-gift matching to stretch your dollars further.
To prevent gift-tax implications, donors must give $19,000 or less per individual in 2025 (this limit doesn’t apply to donations to 501(c)(3) organizations). Whether you pair your financial gift with something more tangible, your thoughtfulness will surely be appreciated for years to come. From our family to yours, we hope you have a very blessed holiday season!
Not investment, tax, accounting, or legal advice. Roth contribution limits: those age 50+ may contribute the lesser of earned income or $8,000 in 2025. Growth figures assume a 7% annualized rate of return.
