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Are You a Giving Aunt?
By Fairport Wealth
In Celebration of Aunts
Millions of generous aunts and uncles across the country give their time, love and financial support to their nieces and nephews. According to one recent study, Professional Aunts with No Kids (affectionately known as PANKs) hold a particularly special place in children’s lives as confidantes and caregivers — and PANKs are generous, collectively giving about $61 billion to an average of 2.5 nieces and nephews each year.1
If you are a giving PANK, here are some ways to provide the children you love a leg up, financially:
Contribute to a 529 savings plan. This will not only help your nieces and nephews finance the cost of higher education, but may also qualify as a tax deduction for you. Just keep the federal gift tax (a tax on the transfer of property from one individual to another) in mind.
Help your nieces or nephews (who have earned income) save for retirement. Open or fund a Roth or Traditional IRA, per IRS guidelines, to allow more time for the assets to benefit from the power of compounding interest.
Give them a gift outright. Your loved ones may need assistance paying for big-ticket items, such as a computer or car.
For 2020, the annual gift tax exclusion is $15,000 per person.2 This means you can give each of your nieces and nephews up to $15,000 (whether in the form of a educational or retirement plan or outright gift) without paying the gift tax this year.
Include your nieces and nephews in your estate plan. You can potentially designate them as beneficiaries in your retirement plans (such as 401ks and IRAs) and life insurance policies.
Educate your loved ones about financial planning. Leverage an array of Luma Wealth resources as guides for teaching them how to develop healthy financial habits, save for the future, invest with an impact, give to philanthropies and more.
Make sure the children you love are included in your wealth plan by speaking with your advisor about your intentions to give. And for additional tips on financial wellness, please join us for one of our upcoming virtual events.
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1 Generation PANK®, A Report on the Social & Economic Influence of PANKS – Professional Aunts No Kids, savvieauntie.com, http://savvyauntie.com/Customimages/GENERATION%20PANK_MELANIE%20NOTKIN%20MEDIA%20INC_Nov%202018.pdf
2 Frequently Asked Questions on Gift Taxes, IRS, https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
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