7 ways to give your your grandkids money that will help them get ahead in life

Brian Snyder/Reuters

With college costs and debt on the rise, just about the best thing you can do for a grandchild these days is help them avoid starting out their adult lives in the red.

For a grandchild who’s still rather young, helping them start saving for college in a state-sponsored, tax-advantaged 529 savings plan could be a big help. These investment accounts are opened in a child’s name, anyone can contribute to them, and they can be transferred to another beneficiary to be used for qualified education expenses, should the original beneficiary not need the funds.

Each state specifies a different annual contribution limit, but note that in 2019 the IRS allows individuals to gift up to $15,000 a year without incurring the gift tax — meaning as a couple, you and your spouse could gift each of your grandkids up to $30,000 a year, 529 contributions included.

But you don’t have to give them $15,000 — or $30,000 — a year for your gift to be truly valuable in the future. Any amount counts. “We’re facing an era of high debt,” says Pak. And for most kids starting their life today, he says, the philosophy is, “If you can can get any type of assistance, you have to take it.”