Mar 17, 2026 | Family Wealth Advising, Investment Management, Q&A

Helping Your Children Invest—and Prepare to Manage Wealth

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Grandparent showing grandchild their Roth IRA on computer

If you’ve built meaningful wealth, one of the most important questions becomes: are your children prepared to manage it? That preparation goes beyond choosing investments. It starts with helping them understand how money works—how it grows, how it’s taxed, and how it can support the life you want for your family over time.

Roth IRAs: A Strong Starting Point (When Eligible)

If your children or grandchildren have earned income, a Roth IRA can be a powerful tool. Because contributions are made after tax, the account grows tax-free, and qualified withdrawals in retirement are also tax-free. Starting early gives decades of compounding, which can meaningfully impact long-term outcomes.

For 2026, contributions are capped at $7,000 per year (or earned income, if lower) or $8,000 if age 50+.

when a roth IRA isn’t an option

If your children don’t have earned income—or you simply want more flexibility—a taxable brokerage account is often the next best step.

These accounts have no contribution limits, allow full access to funds, and can be used to gradually transfer assets over time. While less tax-advantaged, they provide flexibility and can still support long-term investing habits.

Preparing Your Children for More Than Just Investing

For many parents, the bigger priority isn’t just helping children start investing—it’s preparing them to steward what you’ve built. That includes helping them understand how investment decisions are made, how taxes impact long-term outcomes, and how different pieces of your financial plan work together. But just as importantly, it means helping them understand your intentions:

What your wealth is meant to support
How it fits into your family’s values
How thoughtful decision-making today affects future generations

These conversations can be just as important as any portfolio strategy.

how we support you and your family

At Godsey & Gibb Wealth Management, we don’t just work with you—we’re here as a resource for your family as well. Our Wealth Advisors can help you bring children and grandchildren into the fold to understand their role in your financial goals. As complexity increases, we can also help everyone involved navigate taxes, retirement, and eventual wealth transfer.

Our advisors are accessible, and we aim to build relationships not just for today, but over time—so your family has a trusted place to turn as responsibilities evolve. As planning becomes more complex, having someone who understands both the financial and personal side of these decisions can make a meaningful difference. If you’d like help thinking through all these factors, we would love to chat with you. Please give us a call or reach out to us via our contact form.

How Retirement Accounts and Taxes Affect How Much You Need

A retirement nest egg of $1,000,000 in a traditional 401 k is not the same as $1,000,000 in a Roth account or taxable brokerage account. Taxes can significantly change how much retirement income you actually get to spend.

Account types and taxation:

Pre-tax accounts (traditional 401(k), traditional IRA): Withdrawals from 401(k)s and traditional IRAs are typically taxable as ordinary income
Tax-free accounts (Roth IRA, Roth 401(k)): Qualified withdrawals are generally tax-free
Taxable accounts (joint brokerage, trusts): Subject to capital gains taxes

Retirement income may still be taxable, including traditional 401(k)/IRA withdrawals and Social Security taxation. Required minimum distributions from an individual retirement account or employer sponsored retirement plan start at age 73 under current law, potentially forcing higher taxable income and affecting Medicare premiums.

State income taxes differ significantly. Virginia and South Carolina tax retirement income (though SC offers some exemptions), while Florida and Arizona have no state income tax. Relocating in retirement may affect your gross income needs after tax.

Tax-aware withdrawal strategies—such as blending withdrawals from traditional and Roth accounts, realizing capital gains strategically, or performing Roth conversions before RMD age—may help optimize your financial situation. However, tax laws and brackets can change. Working with a team that integrates investment management with ongoing tax strategy and preparation, like Godsey & Gibb’s in-house CPA team, can help keep your retirement plan and tax advice current. Consult your tax advisor for guidance on your particular investment and account structure.

Pitfalls of Popular On/Off-Track Benchmarks

Widely-referenced age-based retirement savings goals suggest you have: 1x your annual salary saved by age 30, 3x by 40, 6x by 50, 8x by 60, and 10x by age 67 to maintain your current lifestyle in retirement if you plan to retire at this traditional retirement age. A common guideline is to save between 10% and 15% of your annual pretax income for retirement, assuming a 40- to 45-year working career.

This framework was developed by Fidelity Investments internal research around 2014 and used in part as a marketing tool. Certain assumptions—such as social security accounting for 35% of one’s retirement income—are inapplicable to many affluent retirees. The framework was validated for incomes between $50,000 and $300,000, another indication it doesn’t apply to everyone.

Common pitfalls that distort how much money someone thinks they need:

Underestimating healthcare costs
Ignoring inflation’s impact on living expenses over 25+ years
Assuming very high future results from investment strategies
Not planning for long-term care or surviving spouse needs

A retirement calculator can help gauge whether current retirement savings and asset allocation align roughly with targets, but complex situations—business owners, large concentrated stock positions, potential inheritance—usually benefit from professional modeling. Investing involves risk, and actual investment results will vary.

At Godsey & Gibb, we frequently review progress towards retirement with clients and adjust their savings plan as markets, tax law, and personal financial goals evolve.

A retired couple strolls hand in hand through a serene park, surrounded by lush greenery and blooming flowers, enjoying their time together in nature. Their relaxed demeanor reflects the joys of retirement, a time when they may also be considering aspects of their healthcare, such as Medicare premiums and the impact of modified adjusted gross income on their medical insurance costs.

Why a Personalized Retirement Plan and Ongoing Professional Guidance Matter

How much retirement income you need is not a one-time calculation. It’s a moving target influenced by markets, inflation, health, tax legislation, family needs, and personal goals. To start saving effectively for retirement, you may benefit from a plan that adapts.

A personalized retirement plan typically includes:

A detailed retirement budget and spending map
Investment strategy aligned with investment objectives
Tax strategy coordinated with distributions
Estate and legacy planning (wills, trusts)
Risk management (insurance, long-term care planning, survivor income planning)

Developing the plan is only half the work. Executing the plan—making investment changes, tax decisions, and distribution adjustments year by year—is equally complex. Many retirees find that working with financial advisors who can delay retirement decisions strategically, coordinate employer match optimization while still working, and manage the transition is valuable.

Godsey & Gibb’s model brings financial planners, portfolio managers, and CPAs under one roof so that tax strategy, investment management, retirement income planning, and estate considerations can be coordinated. We focus on helping clients understand how much retirement savings they may need given their current age and goals, leveraging expertise in all the necessary areas of complexity.

If you’re in the Richmond, Greenville, Jacksonville, or Phoenix areas, consider a conversation with a fiduciary financial planner to refine your own directional retirement number. With thoughtful planning, periodic review, and the right advisory team, we strive to help clients approach their retirement years with greater clarity and confidence about how much income their savings may support.

MEET WITH AN ADVISOR

Information contained herein is for general educational purposes only and is not intended to be substituted for personalized investment, financial, tax, or legal advice as individual situations can vary. The use of charts, graphs, formulas, and other illustrations are not intended to be used independently to guide investment decisions or to determine which securities to buy or sell, or when to buy or sell them. Information was obtained from sources considered reliable, but no representations or warranties are made to its accuracy, timeliness, suitability, or completeness. Statements expressed are opinions of certain Godsey & Gibb Wealth Management personnel and are subject to change without notice. Forward-looking statements expressed herein are subject to change due to shifts in the market and economic conditions. Full disclosure: https://www.godseyandgibb.com/disclosure/

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