3 Wealth-Building Hacks to Set Your Kids Up for Financial Independence

As a financially engaged parent or grandparent, you’re probably already thinking beyond just covering college tuition. You’re thinking legacy. Independence. Long-term wealth.

At The Noble Group, we work with families who want to go a step further—who want to give their kids more than a solid education. They want to give them a head start on financial freedom.

In this post, we’ll break down three lesser-known but powerful financial strategies to help you do just that. These aren’t gimmicks. These are real tools families are using today to help their kids start strong—and stay strong—for decades to come.

1. Convert Leftover 529 Plan Funds into a Roth IRA

Didn’t use all the money in your child’s 529 college savings plan? You now have a powerful new option: convert up to $35,000 of that leftover balance into your child’s Roth IRA, tax- and penalty-free.

Here’s how it works:

• The 529 account must be at least 15 years old

• Annual Roth contribution limits still apply

• The Roth IRA must be in the beneficiary’s name

  
  

This strategy transforms unused college savings into long-term, tax-free retirement dollars.

Example:

Imagine your daughter graduates college with $35,000 left in her 529. You convert it into a Roth IRA over several years. If that account grows at an average of 7% annually, it could be worth over $500,000 by the time she retires.

That’s an entire retirement account—built from education savings.

2. Open a Roth IRA for Your Child (As Soon As They Have Earned Income)

This next strategy is all about starting early and letting time work its magic.

As soon as your child starts earning income (even if it’s just from babysitting, mowing lawns, or working retail), they’re eligible for a custodial Roth IRA.

You manage the account, they own it. Best of all, you can gift them the contribution amount as long as it doesn’t exceed their earned income or the IRS contribution limit.

Example:Your 16-year-old earns $4,000 in a year. You gift that amount into their Roth IRA. If left untouched and invested at 7%, that single $4,000 contribution could grow to over $80,000 by the time they’re 60.

Now let’s say they earn $4,000 for 5 years in a row, and you contribute each year. That five-year streak could grow into over $340,000 by the time they retire.

That’s the power of compound growth—and a financial lesson they’ll never forget.

3. Fund an HSA for Your Child (If They’re Eligible)

The Health Savings Account (HSA) is one of the most underutilized tools for building long-term wealth—and your adult child may be able to take full advantage.

Once they’re no longer your tax dependent and have a High-Deductible Health Plan (HDHP) through work, they can open their own HSA.

Why it’s so powerful:

• Contributions are tax-deductible

• The money grows tax-free

• Withdrawals for qualified medical expenses are tax-free

• After age 65, non-medical withdrawals are allowed (taxed like a traditional IRA)

  
  

Example:

Your 24-year-old son has an HDHP and is financially independent. You gift him $4,000 to fund his HSA. If he invests it and leaves it alone for 40 years, that single contribution could grow to over $59,000 tax-free.

Now imagine doing that for 5 straight years. That five-year gift could compound into over $340,000—a future medical expense fund, a retirement cushion, or both.

And here’s the kicker: if he pays out of pocket for medical expenses now and saves the receipts, he can withdraw those funds tax-free decades later.

The Takeaway

These three strategies work together beautifully to create a foundation of financial strength your kids may not even realize is possible:

• Convert unused 529 funds to a Roth IRA

• Open a Roth IRA as soon as they earn income

• Fund an HSA once they’re eligible

  
  

These aren’t just smart moves—they’re intentional, strategic ways to transfer wisdom, not just wealth.

Disclosures:

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees inherent to investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal.  No strategy assures success or protects against loss.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.

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