Investing for a 1-Year-Old
At age 1, all investment accounts are parent-controlled. The child has a 64-year runway to age 65 and no earned income, so no IRA is available yet. The priority order for a 1-year-old's family:
- Family emergency fund (3-6 months of expenses in liquid savings)
- Employer 401(k) match capture for the parent(s)
- 529 education plan contributions
- UGMA/UTMA for long-term wealth transfer
A 529 plan opened at age 1 has a 17-year education horizon. Age-based 529 portfolios start with high equity exposure and automatically shift toward bonds as college approaches.