Birth to Twenty-Two Account Picker

How the picker decides

The four accounts are ranked for the money in your hand today, not in the abstract, so the order changes with your child's age, what the money is for, whether they have earned income, and whether you are putting money in or taking it out. Three rules do most of the work.

A 529 leads when education is the goal, because growth and qualified withdrawals are tax-free and a parent-owned 529 is assessed far more gently in the aid formula than an account in your child's own name. Outside education, a non-qualified withdrawal is taxable on the earnings with a 10% penalty on top, and narrow exceptions apply[1]. A custodial Roth IRA takes priority for every earned dollar once a child has earned income, since a contribution requires compensation[2] and decades of compounding is the thing being bought. And a custodial account drops off the list entirely once your child reaches the transfer age — at that point it is simply their own brokerage account, which is why the picker runs to twenty-two rather than stopping at eighteen.

For the full comparison of the four accounts side by side, see 529 vs. custodial vs. Roth. Roth IRA for kids covers the earned-income records a custodial Roth needs, a child's first bank account covers the savings end, and college funding covers the 529 rules in depth. If you want the arithmetic rather than the account choice, the college savings calculator runs the numbers.

When the money stops being yours to manage

A custodial account has an end date. On that birthday the money is your child's outright, to do what they like with, and the picker drops the account from the list for exactly that reason. The age is set by the statute of the state the account lives in — and it is the one input here worth checking rather than trusting, which is why the field is editable.

UTMA is law in all fifty-one jurisdictions. South Carolina was the last to adopt it, in April 2022[3], and Vermont adopted it in 2015[4] — so the picker's UGMA option is only for an account opened before its state's UTMA. Those UGMA ages are labelled unverified on screen, because they come from secondary tables rather than statute: 18 in most states, 19 in Alabama and Nebraska, 21 in Connecticut, Massachusetts, Mississippi, New Hampshire and Rhode Island.

UTMA age of majority by state

Every row below was read against that state's own statute. Gift age is the age for money given outright, or left under a will or trust — the ordinary case when a parent or grandparent funds an account. Other transfers covers money arriving from a fiduciary or to settle a debt, which most states run to the age of majority instead[5]. Eleven jurisdictions make no distinction at all and run every transfer type to one age.

The statute is the default, not the last word: the paperwork that opened the account can name a different age, and in several states the person making the gift may elect one. Ask the custodian what the account itself says.