{"id":609948,"date":"2026-07-29T12:27:13","date_gmt":"2026-07-29T12:27:13","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/609948\/"},"modified":"2026-07-29T12:27:13","modified_gmt":"2026-07-29T12:27:13","slug":"my-12-year-old-has-135000-in-a-brokerage-account-im-considering-taking-a-loan","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/609948\/","title":{"rendered":"My 12-Year-Old Has $135,000 in a Brokerage Account. I\u2019m Considering Taking a Loan."},"content":{"rendered":"

Pay Dirt is Slate\u2019s money advice column. Have a question? <\/strong>Send it to Kristin and Ilyce here<\/strong><\/a>. (It\u2019s anonymous!)<\/strong><\/p>\n

Dear Pay Dirt,<\/strong><\/p>\n

I\u2019m a 48-year-old mom of a 12-year-old son. He was fortunate to receive a modest inheritance from a relative when he was a baby. With market gains, he now has about $135,000 in a taxable brokerage account in my name, informally earmarked for college (I didn\u2019t open a 529 because I\u2019m unsure he\u2019ll go to college in the U.S.). If I leave it alone, I expect he\u2019ll have around $200,000 when he\u2019s 18. However, I\u2019m behind on my own retirement savings.<\/p>\n

I\u2019m self-employed, have about $225,000 saved, and I\u2019ve been struggling the past year to add to my Roth IRA due to some medical expenses and dips in my income. Assuming my income stays at a rate that makes saving for retirement challenging (which I hope it doesn\u2019t, but it\u2019s unpredictable), does it make sense for me to max out my Roth IRA with money from my son\u2019s account until he\u2019s college bound, both to spread out potential capital gains tax on withdrawals, and to \u201cput on my own oxygen mask first\u201d with a better funded retirement account?<\/p>\n

\u2014Ahead on College, Behind on Retirement<\/p>\n

Dear Ahead and Behind,<\/strong><\/p>\n

Was this inheritance intended for his future, or was it a gift to help you with the costs of raising a child? It sounds like the former, in which case, using it for your retirement might have benefits, but you may want to consider the ethics, not just the logistics. Not everyone goes to college, but there are plenty of other scenarios in which that money might be useful to him in the future, whatever path he decides to take in life.<\/p>\n

That said, there is a case to be made for strengthening your own retirement because it could ultimately help your son financially more than keeping it in a taxable investment account\u2014that oxygen mask you mentioned. Plus, I\u2019m guessing your own retirement has probably taken a hit because you\u2019ve spent years paying for childcare, lessons, activities, camp\u2014the list goes on. One could argue that once your retirement is secured, you\u2019d be in a better financial position to help him down the road, whatever path he decides to take.<\/p>\n

Still, the future is always uncertain and you never know what might happen to that money. Right now, it\u2019s earmarked for him, and if he ever learns that his inheritance was used to cover your own retirement, he might feel a certain way about it. That could create more problems down the road.<\/p>\n

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    Let\u2019s talk logistics, though. Yes, there are tax advantages to putting the money in your Roth IRA. Namely, moving money from a taxable account to the Roth converts future taxable growth into tax-free growth. Just keep in mind that if you sell the investments in the taxable brokerage account to do this, you\u2019ll likely have to pay capital gains tax now.<\/p>\n

    If it\u2019s the taxable brokerage account that\u2019s tripping you up (you want the tax advantages that other types of accounts offer) maybe rethink the 529<\/a>. Yes, it\u2019s designed for higher education, but that can cover all sorts of expenses, like trade school, apprenticeships, and even K-12 tuition. And even if your son doesn\u2019t use it for any of those things, he can still take out the money, it\u2019s just that the earnings (not the contributions themselves) would be subject to a 10 percent penalty, because of the tax-free growth. And at some point, some of the unused funds in a 529 can be rolled over into a Roth IRA for your son.<\/p>\n

    If you do decide to use your son\u2019s inheritance to fund your retirement, talk to a Certified Financial Planner to get ahead of any tax consequences, record\u2011keeping requirements, or legal questions about using funds that were originally intended for someone else.<\/p>\n

    \u2014Kristin<\/p>\n

    \n Please keep questions short (<150 words), and don\u2018t submit the same question to multiple columns. We are unable to edit or remove questions after publication. Use pseudonyms to maintain anonymity. Your submission may be used in other Slate advice columns and may be edited for publication.\n <\/p>\n

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