Financial Gift Ideas for All Ages

Financial Gift Ideas for All Ages

The holiday season is close, and it’s time to start thinking of gifts for family and friends. Of course, we encourage you to get the best deals on Black Friday and Cyber Monday, but in addition to those deals, why not consider giving a financial gift? A financial gift can be specific to the recipient’s age and life circumstances and can offer both immediate and long-term benefits to make a real impact.

So, without further ado, here are a few financial gifts that could help your family and friends this holiday season!

Infants and Young Children — 529 Plans

Everyone knows that infants and young ones love receiving brand new toys… at the time, it might seem like the best gift to give. But how long will it take until the child is tired of that toy and wants to move on to another? Maybe this year you could chip into that expensive new toy with a family member and also contribute to the child’s college fund using a 529 savings plan?

529 savings plans are attractive because the contributions grow TAX FREE, and when it comes time to take the money out, the withdrawals for qualified education expenses are ALSO TAX FREE! College prices are only getting higher, so why not start early?

Think about it this way…

• The estimated total cost of completing a two-year public (in-district) college program is about $41,140, based on an average annual cost of roughly $20,570.

• Completing a four-year public in-state college program costs approximately $119,640, using an average annual cost of $29,910.

• Attending a four-year public out-of-state college brings the estimated total to about $196,320, based on an annual average of $49,080.

• A four-year private nonprofit college is the most expensive option, with an estimated total program cost of roughly $251,960, based on an average annual cost of $62,990.

 Source: https://lendedu.com/blog/average-cost-of-college-statistics

Picture those numbers only going up… (and pretend the child won’t have any scholarships or full rides). It’s a large amount of money but can be extremely important for the financial wellness of that child’s future.

Note: 529 donations can also offer estate planning benefits because they are considered ‘completed’ gifts and are removed from the donor’s taxable estate.

Teenagers: Financial Education Resources & Roth IRAs

Now, let’s say you have teenagers in the family. The toys from when they were little aren’t amusing them anymore. Now could be a good time to think about chipping into some financial education resources they may be interested in (after the holidays, of course).

Some examples could include a financial book, or even a course/workshop for them to attend in-person or virtually. In fact, a lot of these financial courses are free. One example of a free resource site is https://www.khanacademy.org/. https://www.coursera.org/  also has a lot of great courses to look into.

Even if it isn’t necessarily a thrilling gift, teaching teenagers the value of money early on is extremely important for the young adult years soon to come.

Also, did you know — if the teenager earned income from a part-time job or other work, they are able to make contributions to a Roth IRA?

Asset Strategy has frequently talked about Roth IRAs as excellent retirement vessels because they allow tax-free growth and tax-free withdrawals in retirement.

Two words: Compounding + Interest: Contributing to a Roth IRA account is better done sooner than later. Let those retirement savings grow early on!

As a financial gift idea, parents and guardians are able to match the teen’s earnings to fund the Roth IRA.

• For tax year 2025, the contribution limit is $7,000.
• For tax year 2026, the contribution limit increases to $7,500.

Young Adults: Investing

Not only do we encourage contributing to Roth IRAs at an early age, but we also encourage you to share the gift of financial shares with young adults. Gifting stocks, mutual funds, ETFs, or similar may be an excellent way to introduce young adults to the wide world of investing.

Letting young adults develop investment strategies on their own is an amazing gift that will teach them the power of a well-built portfolio of investments. With that being said, it is advisable to gift companies or funds with a strong historical track record. And, as always, we need to advise that past performance does not guarantee future results!

Midlife Adults: General Money Gifts, HSAs and Retirement Contributions

It’s always hard to think of gifts for midlife adults because a lot of the time the individuals can purchase things they want for themselves. However, think of the things that don’t necessarily count as the standard holiday gifts: Maybe the person still needs help with student loans, mortgage payments, auto loans, personal loans, or even credit card debt. Even small donations to alleviate debt can be extremely impactful. If the individual needs access to calculators and financial tools, we offer tons of FREE calculators online at https://assetstrategy.com/myblocks/. We just require the individual to provide basic information.

Also, for midlife individuals with high-deductible health plans, helping to contribute to a Health Savings Account (HSA) can be a great financial gift. As individuals age, healthcare costs also tend to rise, which makes HSAs very beneficial due to their triple tax advantages:

1. Any contribution is TAX-DEDUCTIBLE
2. The earnings from HSAs grow TAX FREE
3. Withdrawals for any qualified medical expenses are also TAX FREE

The IRS states that the High Deductible Health Plan Requirements for 2026 are:

• Minimum annual deductible for individual (self-only) coverage: $1,700
• Minimum annual deductible for family coverage: $3,400 
• Maximum annual out-of-pocket expense (deductibles, copayments, and other amounts, excluding premiums) for individual coverage: $8,500
• Maximum annual out-of-pocket expense for family coverage: $17,000

Another midlife gift could be a contribution to the individual’s retirement account. This could be a very nice gift, especially for those who started saving later than most, or those who have experienced some financial setbacks. Ensuring that loved ones are financially comfortable to retire is a meaningful and practical gift.

Seniors: Vacations, LTC, and Estate Planning

Seniors who have fully retired or are working part time may have time available for vacations that they didn’t have in earlier years. A nice financial gift could be partially, or even fully paying for a vacation expense.

A less flashy financial gift (but also very important) could be assisting with the purchase of long-term care coverage.

This could help cover the costs that aren’t covered by regular health insurance. This includes Medicare or Medicaid. Those expenses can add up! Contact us to get started purchasing long-term care insurance.

Finally, probably the most important gift you can give a senior is to help organize their estate plans. This includes wills, trusts, and powers of attorney.  These gifts ensure that their wishes are honored and can prevent legal complications. Covering the costs of legal services for estate planning can be a thoughtful and practical gift. It’s probably not the best topic to bring up during your family’s holiday dinner… but it might be a good suggestion for the new year if the person wants to establish all the legalities. Life is unpredictable, and accidents or unexpected illnesses can occur at any time. Your gift could help organize:

• How assets are distributed
• Who will manage the affairs
• How healthcare decisions are made if incapacitated

Here are some estate planning considerations:

• Making annual, tax-free gifts.
• Transferring life insurance policies to an irrevocable life insurance trust.
• Using a qualified personal residence trust to remove your home from the estate at a discounted value, while still being able to live there.
• Setting up a grantor-retained annuity trust or grantor retained unitrust to remove income-producing assets from the estate at a discounted value (while still being able to receive income).
• Transferring assets to children to reduce your taxable estate by creating a Limited Liability Company or Family Limited Partnership.
• Using a Charitable Remainder Trust to convert appreciated assets into lifetime income with no capital gains tax. This can save both estate and income taxes! 
• Using a Charitable Lead Trust to remove assets from your estate.
• Buying life insurance to replace assets given to charity and/or pay any remaining estate taxes. This is done through an Irrevocable Life Insurance Trust (ILIT).

Remember:

• For tax year 2025: Lifetime gift/estate tax exemption is $13.99 million per individual.
• For tax year 2026: Lifetime gift/estate tax exemption is $15.00 million per individual.
• Annual gift tax exclusion (per recipient) for both 2025 and 2026 is $19,000.

If you’re thinking of establishing an estate plan, you can contact us by setting up a 15-Minute Discovery Call through https://assetstrategy.com/contact. 

Conclusion

Giving the right gift during the holiday season can be stressful, so when in doubt why not give the gift of financial wellness? Financial gifts can often be more meaningful than your standard holiday small gifts. If you have questions on any topics within this blog, feel free to reach out to us! We are more than happy to help.