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Kid IRAŽ Comparison

To better compare the Kid IRAŽ and other investments, we have prepared this chart to showcase their similarities and differences.

Features 529(b) 401(k) IRA Roth
IRA
Whole
Life
Ins.
Savings
Acct.
Savings
Bonds
Tax Benefits
Tax-advantaged deposit YES No YES YES No No No No
Tax-advantaged withdrawal YES YES No No YES YES No No
Account-specific
Flexible Spending YES No No No No No YES No
In child's name? YES No No No No No YES YES
Can be used as child's retirement account YES No No No No No YES YES
Investing
Can be used to invest in stock market? YES YES YES YES YES YES No No
Can be used to invest in real estate? YES No No No No No YES No
Can be used to invest in the child's business ventures? YES No No No No No YES No
Other Educational Kid IRAŽ 529(b) 401(k) IRA Roth
IRA
Whole
Life
Ins.
Savings
Acct.
Savings
Bonds
Can be used to pay for day care expenses? YES No No No No No YES No
Can be used to pay for other school expenses
(supplies, books, materials, clothes, uniforms)
YES No No No No No YES No
Can be used to pay for private school tuition (elementary,high school, etc.)? YES No No No No No YES No
College Expenses
Designed to pay for college tuition fees? YES YES No No No No No No
Can be used to pay for other college-related expenses
(food, rent, utilities, books, travel?
YES YES YES
Investment Values
$5000 per year @ 12% for 10 years* $87,744 $61,421 $65,808 $65,808 $61,421 $61,421 $28,743 $33,017
Kid IRAŽ Difference $26,323 $21,936 $21,936 $26,323 $26,323 $59,001 $54,727
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* Assumes an annual compound interest rate of 12% with a current tax rate of 30% and a post-retirement tax rate of 25%

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