For many families, raising children is among life’s most meaningful - and financially significant - commitments. For parents and grandparents in their peak earning years, the question is no longer simply how to save, but how to do so in a way that aligns with long-term goals, values, and a broader vision for family wealth.
Today’s families often find themselves balancing multiple priorities at once: funding education, preparing for retirement, protecting what they’ve built, and instilling healthy financial habits in the next generation. Thoughtful planning across these areas can help create both opportunity and stability for years to come.
Start Early: The Power of Purpose-Driven Saving
One of the most impactful steps families can take is to begin saving early, and with intention. Vehicles like 529 college savings plans are designed specifically to help families prepare for future education expenses. Contributions grow tax-deferred, and withdrawals used for qualifying education costs are generally tax-free. For families planning for multiple children or grandchildren, these plans can be an efficient cornerstone of an education strategy.
Importantly, 529 plans now offer more flexibility than many realize. They can often be used for certain K-12 tuition expenses and, in some cases, can be transferred between family members if education plans change. For grandparents, these plans can also serve as a meaningful way to contribute to a child’s future while maintaining control over the assets.
IRAs for Children: Small Steps, Long-Term Impact
While retirement accounts may not immediately come to mind when thinking about children, Individual Retirement Accounts (IRAs) - particularly Roth IRAs - can be powerful tools when started early.
If a child or teenager has earned income, even from part-time or summer work, they may be eligible to contribute to an IRA. Because Roth IRA contributions are made with after-tax dollars, qualified withdrawals later in life can be tax-free. Starting early allows these contributions decades to grow, often turning relatively modest amounts into meaningful long-term assets through compounded growth.
For parents and grandparents, supporting or matching a child’s contributions can be a practical way to encourage savings behavior. It also introduces financial concepts - earned income, investing, and long-term planning - in a tangible way.
Balancing Growth and Protection
As families accumulate wealth, preserving it becomes as important as growing it. This is where integrating risk management into a broader financial plan is essential.
Insurance-based solutions, including permanent life insurance, disability, and long-term care considerations - are protective tools, but they can also play a strategic role in a holistic wealth plan. For example, permanent life insurance may help provide income replacement, support estate planning objectives, or create liquidity for future generations. Similarly, disability coverage helps protect earning power during working years, which is often a household’s most valuable asset.
For families with children or dependents, these protections help safeguard against disruptions that could otherwise impact education plans, lifestyle, or long-term goals.
Aligning Education, Retirement, and Legacy Goals
A common challenge for affluent families is managing competing priorities: funding children’s education while maintaining progress toward retirement and considering legacy goals.
A thoughtful approach often begins with clarity. Education funding, while important, typically should not come at the expense of retirement readiness. Students and families have access to various education funding options, but there are fewer avenues to replace retirement savings.
This doesn’t mean choosing one goal over another, it means structuring a plan where each objective is addressed in balance. For some families, this may include a combination of 529 savings, taxable investment accounts, and selective gifting strategies that support both education and wealth transfer goals.
Teaching Financial Confidence at Home
Beyond the numbers, one of the most valuable investments families can make is in financial education. Children often absorb financial behaviors long before they fully understand them. Involving them in age-appropriate conversations, whether about saving for a goal, contributing to a charitable cause, or managing a first paycheck, can help build confidence and responsibility.
Even small actions, like encouraging a child to set aside part of their earnings or contributing to a long-term account in their name, reinforce the idea that wealth is built gradually and thoughtfully.
A Family-Centered Approach to Wealth
Ultimately, building wealth across generations is about more than accounts or strategies. It’s about creating a framework that supports your family’s values, protects against uncertainty, and provides opportunities for those who follow.
For parents and grandparents navigating these decisions, a coordinated approach, one that integrates savings strategies like 529 plans and IRAs with risk management and long-term planning, is often most effective when done in partnership with a trusted financial advisor. An advisor can help tailor strategies to your family’s specific goals, navigate changing regulations, and ensure each piece of your plan is working together cohesively.
As your family evolves, so too should your strategy. Thoughtful planning today, guided by experienced advice, can help ensure that the next generation is not only supported, but prepared.
Brandon Gunter is a Wealth Management Advisor contracted with Northwestern Mutual. For more information, including disclosures, please visit http://www.brandonguntor.com/
This information is for educational purposes only, please consult with the appropriate professional for advice specific to your circumstances. The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.
"We focus on integrating security, property, and legacy. We help protect what's most important, create enduring wealth, and maximize multi-generational impact" - Brandon Guntor.