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As the year draws to a close, many of us are thinking about year-end financial planning and finding meaningful holiday gifts for our loved ones. Why not combine the two? Here are some of our favorite ways to give financial gifts that can make a lasting impact:
John is the Outsourced Chief Investment Officer (OCIO) at Secfi. An expert in portfolio construction and investments, he helps individuals maximize returns and control risks unique to their situation.
A donor-advised fund is a charitable giving account that you control. By gifting cash or appreciated assets to a DAF, you can receive significant tax benefits, especially by clumping multiple years of charitable giving into one. Not only do you get a deduction for the donation, but if you contribute appreciated assets instead of cash, you avoid capital gains taxes, maximizing the value of your gift. You can then disburse funds to your favorite charities over time. At Secfi Wealth, we partner with DAFFY and cover membership fees for clients who want to leverage this powerful giving strategy.
529 plans are designed for education savings, offering tax-free growth while the funds are invested. When used for qualifying education expenses, the gains remain untaxed. Gifting to a 529 plan not only helps your loved one prepare for future education costs but also takes advantage of unique tax benefits.
Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) accounts may offer more flexibility than a 529 plan. A parent or guardian manages these custodial accounts until the minor reaches the age of majority, at which point the assets become theirs. The tax advantage? The account’s appreciation is taxed at the recipient’s potentially lower rate rather than the giver’s higher rate.
While the buzz around I bonds has quieted as inflation has cooled, they’re still a smart option for preserving purchasing power over time. Indexed to inflation, I bonds can be purchased directly from the U.S. Treasury and linked to a child’s account, making them a thoughtful gift with enduring value.
Estate planning might not sound like a gift, but it’s one of the most impactful ways to protect your loved ones and ensure your wishes are honored. Setting up trusts or creating a comprehensive estate plan can provide peace of mind and financial security for your family. Having experienced the challenges of managing a loved one’s estate without a plan, I can personally attest to the importance of this step.
Books can be incredibly meaningful, especially when the insights stick. If you’re okay with being the one who gives books during the holidays, consider the following titles the Secfi Wealth team has enjoyed.
We like this one so much that we sent it out to our clients this year. This is an entertaining and educational read that’s relevant for DIY investors and professionals.
This is the story of arguably the most disruptive and successful innovation in investing.
This is a short, practical, jargon-free book that gets right to the point on critical finance topics.
Each of these ideas combines financial wisdom with the spirit of giving, creating gifts that last far beyond the holiday season. Whether you’re looking to give a gift that educates, secures a future, or supports a cause, it’s possible to give a meaningful gift that combines the spirit of the season and financial well-being.
Happy Holidays from all of us at Secfi!