The new UGMA product provides a way to hold and manage investments, giving parents control over the assets until the child reaches the age of majority. Unlike a 529 account––which can only be used for qualified educational expenses and a limited amount of funds can be converted into a Roth IRA––funds in a UGMA can be used for anything that directly benefits the minor. Whether it’s their first car, travel, band equipment, astronaut camp, or future educational costs, 100% of funds deposited can be used towards the betterment of the child. UGMA accounts also offer several tax advantages vs. traditional taxable accounts, allowing the child to benefit more from potential investment gains1.
“As a parent, you want to give your kids a head start on their financial future, but setting up an investment account for them can be intimidating. Fabric by Gerber Life makes it quick and easy for parents to take that critical first step,” said Adam Erlebacher, Fabric CEO. “As an organization founded by parents, for parents, Fabric’s goal has always been to help families secure their financial futures without headache. The addition of UGMA investing is another key tool for parents to support their kids, and a powerful addition to our one-stop shop of life insurance, estate planning, and financial organization tools for families.”
The 2023 Finder Consumer Confidence Index found that increased inflation rates have affected 58% of Americans’ saving habits. As the economic landscape continues to remain volatile, providing parents with straightforward and automated tax-advantaged investing options is essential to help plan for their future.
Simple setup, easy to use
The new UGMA product is fully digital, like the rest of Fabric’s suite of products. Once the brief setup process is complete, parents can manage and monitor investments from their mobile devices. The platform helps investors determine risk tolerance levels by selecting a portfolio that fits their unique needs, with the ability to change and adapt alongside the child’s developing life stages.
Fabric makes investing easy and accessible. Investors can contribute as little as $1 per day with automatic contributions to grow assets with ease. The cost of an account for one child is only $3/month, while multiple accounts will incur a $5/month flat fee total2.
A better way to gift
Investors can share their child’s unique gifting link with family and friends who can send personalized financial gifts for birthdays, holidays, or just because. Gifters are able to contribute as little as $20 and can do so as frequently as they choose. UGMA accounts have no contribution limits, providing the opportunity to save larger amounts3.
Building a habit with a brand you can trust
When it comes to investing, consistency is key. Fabric by Gerber Life is making it easy to automatically contribute to a child’s account for consistent growth and value over time. Model portfolios are managed by Fabric’s SEC-registered partner, Fort Washington Investment Advisors, with over 30 years of experience and $70+ billion assets under management, as of September 2023. Accounts are SIPC-insured up to $500K and bank-level encryption is used to protect investors’ sensitive information.
To learn more about how Fabric by Gerber Life helps tens of thousands of American families achieve long-term financial security, visit meetFabric.com.
1 Fabric by Gerber Life and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
2 For more info, visit https://meetfabric.com/legal/.
3 Check Federal and State gift taxes before contributing.