Investing as a Growing Family - FAQ

Welcoming children into your family is an exciting decision, but can come with new worries and stresses as well. Whether this is your first, second or fifth addition, the financial questions and concerns are as valid and stressful as ever. Below, the financial specialists at SII have compiled a list of several frequently asked questions by growing families, along with responses. If you find that you still have some concerns regarding your unique situation, don't hesitate to contact your independent financial advisor.

What is the most pressing investment opportunity my growing family should focus on?

In most cases, our specialists recommend making your personal retirement planning a top financial concern. As you continue to age and your family expands, you are also getting closer to retirement! It may still seem far away, but now is the perfect time to reevaluate your investment strategies. Although taking another in-depth look at your retirement savings plan is important, there are also other aspects of your financial strategy—insurance, cash flow, college funding, accumulation of assets—that you should be considering. Since your situation is unique, it's essential that you consult with your independent consult to make any necessary revisions or decisions regarding your future. You may also find our growing family sample portfolio asset allocation chart helpful.

What kinds of tax benefits should I look into as my family continues to grow?

In addition to adding another bundle of joy, you also qualify for numerous tax benefits. Some of these benefits are in the form of deductions, while others are tax credits.

  • Deductions can be extremely helpful for reducing your taxable income. One of the most immediate forms of benefits you receive is a dependent exemption.
  • Credits can directly reduce your taxes. For example, the child tax credit lets you reduce your tax bill by $1,000 for each qualifying child under the age of 17. Another option for families that pay childcare expenses for a youngster under age 13 is the dependent care credit. To learn more about the various opportunities available, please consult with a tax advisor.

What sorts of documents do I need to consider updating?

As your family expands, it's time for you to consider updating important documents that you had previously established. Updating or preparing a will, establishing a power of attorney, and updating your trust are among the many documents that you should establish or reassess. Talking to your independent investment consultant at this point in your life will also be helpful, as they'll be able to guide you along the path of updating this vital information.

I've established college funds for my children. Now what?

Now that you're adding another loved one to the lineage, you may find the need to increase the amount that you're investing. The cost of college continues to increase, so it's important that your investment strategies meet the increase. You may need to adjust the amount invested per child to stay within your budget, yet meet your investment goals.

How do I find a balance between saving and investing in my family?

This is a question that we often hear from new parents, too, and it's not a simple answer. Each family is unique, so it's vital that you consult with an experienced investment professional. They'll review your situation to guide you in finding a balance, if possible. Ultimately, you need to focus on preparing for retirement and ensuring that you're insured and investing in your own future. In most cases, preparing a college savings account shouldn't be your top priority.

If you still have questions after reading through the various questions, feel free to contact SII Investments. We look forward to listening to your concerns and providing feedback that's beneficial to you and your family.