If you’re fortunate enough to have money left over from your child(ren)’s Survivor benefits every month, the Social Security Administration (SSA) has guidelines on how to save those funds. Per my recent blog post on saving your child’s SS survivor benefits, one of the rules is that funds over $500 should be placed in an interest-bearing account or investment for the benefit of your child, where the interest and dividends are the property of your child. Below are different types of savings vehicles that meet this requirement, depending on your child’s need.

Savings Vehicle	Purpose of Funds	How It Works
Custodial Account	General purpose	Also known as an UGMA/UTMA account, a custodial account is managed by an adult on behalf of a child and then transferred to that child between the ages of 18 and 25, depending on the state where it was opened. Learn more about custodial accounts.
U.S. Savings Bonds	General purpose	Series EE and Series I savings bonds offer low-risk, long-term investments with tax-deferred interest growth. Any adult can buy these bonds electronically through Treasury Direct on behalf of a minor. Learn more about U.S. savings bonds.
529 Plan	Your child’s education	There are two types of 529 plans: The most common one (and the one I have for my daughter) is a savings plan where your money grows tax-free, and distributions are tax-free when used for qualified education expenses. The other type of 529 plan is a prepaid tuition plan where you prepay tuition at today’s rates at specific colleges or universities. Learn more about 529 plans.
Custodial IRA	Your child’s retirement	A custodial IRA is managed by the guardian of a child until they reach the age of 18 or 21, depending on the state where they live. The IRA can be a traditional IRA where contributions are pre-tax and grow tax-free, but are taxed when withdrawn. Or it can be a Roth IRA where contributions are post-tax, but then grow and are withdrawn tax-free. In order to contribute to it, the child must have earned income from a job. Note: While Social Security benefits are not considered earned income, they can be contributed to a custodial IRA as long as the child has the same amount or more in earned income. Learn more about custodial IRAs.
Trump Account	Your child’s retirement	New in 2026, a Trump account lets you save for your child’s retirement without requiring that your child have earned income, unlike the custodial IRA. A huge perk is that for children born between 2025 and 2028, the federal government will contribute $1,000 to the account, so it’s worth opening one for that alone. The account converts to a traditional IRA once your child turns 18. Learn more about Trump accounts.
ABLE Account	Your child’s disability	If your child is disabled, you can save for their qualified disability expenses in an ABLE account while keeping benefits such as Supplemental Security Income and Medicaid. Learn more about ABLE accounts.

Disclaimer: The information shared on this page is for general information and educational purposes only. It is not intended to be financial or investment advice. Always do your own research or speak with a qualified professional before making any financial decisions.