Savings Accounts for Future Child Expenses












8















If I were looking to have a kid in the next 3-6 years, what (if any) tax-advantaged plans exist to help saving for future, related expenses?



To be more specific, there are numerous types of savings plans that offer pre-tax contribution, reduced taxes on growth, or no income tax on disbursements that are affiliated with specific, major lifetime events (such as 529 plans for college, or 401ks/IRAs for retirement). What I have not been able to find are plans that generally allow for future child-rearing expenses, including:




  1. Hospital visits for pregnancy care

  2. Formula, diapers, clothing, other consumables

  3. Daycare


Of these significant, relatively predictable expenses, only the first has any related plans that I know of (specifically HSAs and FSAs), and it isn't limited to having kids. Do any plans specifically for future parents exist to help offset the costs of having a baby?



To be specific, I am not asking about major expenses later on in the child's life (like this question). I am asking about major expenses that the parents will face in the first few years of (and the months leading up to) parenthood.










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  • Daycares are typically a valid use for a dependent-care FSA. I very much doubt there is anything for #2.

    – chepner
    Feb 6 at 19:55






  • 1





    @chepner dep care FSA can't be pre-funded three years ahead.

    – stannius
    Feb 12 at 18:30
















8















If I were looking to have a kid in the next 3-6 years, what (if any) tax-advantaged plans exist to help saving for future, related expenses?



To be more specific, there are numerous types of savings plans that offer pre-tax contribution, reduced taxes on growth, or no income tax on disbursements that are affiliated with specific, major lifetime events (such as 529 plans for college, or 401ks/IRAs for retirement). What I have not been able to find are plans that generally allow for future child-rearing expenses, including:




  1. Hospital visits for pregnancy care

  2. Formula, diapers, clothing, other consumables

  3. Daycare


Of these significant, relatively predictable expenses, only the first has any related plans that I know of (specifically HSAs and FSAs), and it isn't limited to having kids. Do any plans specifically for future parents exist to help offset the costs of having a baby?



To be specific, I am not asking about major expenses later on in the child's life (like this question). I am asking about major expenses that the parents will face in the first few years of (and the months leading up to) parenthood.










share|improve this question























  • Daycares are typically a valid use for a dependent-care FSA. I very much doubt there is anything for #2.

    – chepner
    Feb 6 at 19:55






  • 1





    @chepner dep care FSA can't be pre-funded three years ahead.

    – stannius
    Feb 12 at 18:30














8












8








8








If I were looking to have a kid in the next 3-6 years, what (if any) tax-advantaged plans exist to help saving for future, related expenses?



To be more specific, there are numerous types of savings plans that offer pre-tax contribution, reduced taxes on growth, or no income tax on disbursements that are affiliated with specific, major lifetime events (such as 529 plans for college, or 401ks/IRAs for retirement). What I have not been able to find are plans that generally allow for future child-rearing expenses, including:




  1. Hospital visits for pregnancy care

  2. Formula, diapers, clothing, other consumables

  3. Daycare


Of these significant, relatively predictable expenses, only the first has any related plans that I know of (specifically HSAs and FSAs), and it isn't limited to having kids. Do any plans specifically for future parents exist to help offset the costs of having a baby?



To be specific, I am not asking about major expenses later on in the child's life (like this question). I am asking about major expenses that the parents will face in the first few years of (and the months leading up to) parenthood.










share|improve this question














If I were looking to have a kid in the next 3-6 years, what (if any) tax-advantaged plans exist to help saving for future, related expenses?



To be more specific, there are numerous types of savings plans that offer pre-tax contribution, reduced taxes on growth, or no income tax on disbursements that are affiliated with specific, major lifetime events (such as 529 plans for college, or 401ks/IRAs for retirement). What I have not been able to find are plans that generally allow for future child-rearing expenses, including:




  1. Hospital visits for pregnancy care

  2. Formula, diapers, clothing, other consumables

  3. Daycare


Of these significant, relatively predictable expenses, only the first has any related plans that I know of (specifically HSAs and FSAs), and it isn't limited to having kids. Do any plans specifically for future parents exist to help offset the costs of having a baby?



To be specific, I am not asking about major expenses later on in the child's life (like this question). I am asking about major expenses that the parents will face in the first few years of (and the months leading up to) parenthood.







united-states investing investment-strategies children tax-free-savings






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share|improve this question










asked Feb 6 at 17:27









WannabeCoderWannabeCoder

1,0142715




1,0142715













  • Daycares are typically a valid use for a dependent-care FSA. I very much doubt there is anything for #2.

    – chepner
    Feb 6 at 19:55






  • 1





    @chepner dep care FSA can't be pre-funded three years ahead.

    – stannius
    Feb 12 at 18:30



















  • Daycares are typically a valid use for a dependent-care FSA. I very much doubt there is anything for #2.

    – chepner
    Feb 6 at 19:55






  • 1





    @chepner dep care FSA can't be pre-funded three years ahead.

    – stannius
    Feb 12 at 18:30

















Daycares are typically a valid use for a dependent-care FSA. I very much doubt there is anything for #2.

– chepner
Feb 6 at 19:55





Daycares are typically a valid use for a dependent-care FSA. I very much doubt there is anything for #2.

– chepner
Feb 6 at 19:55




1




1





@chepner dep care FSA can't be pre-funded three years ahead.

– stannius
Feb 12 at 18:30





@chepner dep care FSA can't be pre-funded three years ahead.

– stannius
Feb 12 at 18:30










2 Answers
2






active

oldest

votes


















11














There aren't any.




Of these significant, relatively predictable expenses




I would not necessarily classify child birth cost as either significant or predictable.



Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal vitamins are often prescribed so insurance will pay all or part of their cost. This does not happen with most adults with other conditions, but the vitamins have such a positive effect on outcomes, that it is acceptable practice by all involved. If no insurance exists there are many budget friendly ways to birth a baby including midwifes and home delivery.



Then there is the other side of the coin. Costs for unhealthy baby births can go through the roof. This can be applicable to both mom and baby. In one case, of which I am familiar, a healthy baby developed jaundice so severe she had to spend a few days in the NICU. After that she was just fine. Luckily mom and dad had decent healthy insurance and their out of pocket was not much.



In this case I really like Dave Ramsey's advice on this subject. When momma gets pregnant pause some financial goals and save money. When mom and baby are home fine for a couple of weeks use that saved money to whatever financial goal you are then working. If needed having that extra cash helps alleviate some of the stress associated with a loved one being sick.



There is no favorable tax treatment for the birthing of a baby specifically. All of it just falls under any favorable treatment for medical costs.



You are best off saving money in a taxable account with mutual funds that are tax efficient. You want accounts that spin off little capital gains, or bond funds that might pay tax free.






share|improve this answer



















  • 6





    "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

    – Mason Wheeler
    Feb 6 at 23:18



















12














If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money.



You may decide that in the year the child is born to pick a non-high deductible plan, but because the money on the HSA doesn't expire you can then use the money in the HSA even if you don't currently have a qualifying high deductible plan.






share|improve this answer
























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    2 Answers
    2






    active

    oldest

    votes








    2 Answers
    2






    active

    oldest

    votes









    active

    oldest

    votes






    active

    oldest

    votes









    11














    There aren't any.




    Of these significant, relatively predictable expenses




    I would not necessarily classify child birth cost as either significant or predictable.



    Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal vitamins are often prescribed so insurance will pay all or part of their cost. This does not happen with most adults with other conditions, but the vitamins have such a positive effect on outcomes, that it is acceptable practice by all involved. If no insurance exists there are many budget friendly ways to birth a baby including midwifes and home delivery.



    Then there is the other side of the coin. Costs for unhealthy baby births can go through the roof. This can be applicable to both mom and baby. In one case, of which I am familiar, a healthy baby developed jaundice so severe she had to spend a few days in the NICU. After that she was just fine. Luckily mom and dad had decent healthy insurance and their out of pocket was not much.



    In this case I really like Dave Ramsey's advice on this subject. When momma gets pregnant pause some financial goals and save money. When mom and baby are home fine for a couple of weeks use that saved money to whatever financial goal you are then working. If needed having that extra cash helps alleviate some of the stress associated with a loved one being sick.



    There is no favorable tax treatment for the birthing of a baby specifically. All of it just falls under any favorable treatment for medical costs.



    You are best off saving money in a taxable account with mutual funds that are tax efficient. You want accounts that spin off little capital gains, or bond funds that might pay tax free.






    share|improve this answer



















    • 6





      "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

      – Mason Wheeler
      Feb 6 at 23:18
















    11














    There aren't any.




    Of these significant, relatively predictable expenses




    I would not necessarily classify child birth cost as either significant or predictable.



    Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal vitamins are often prescribed so insurance will pay all or part of their cost. This does not happen with most adults with other conditions, but the vitamins have such a positive effect on outcomes, that it is acceptable practice by all involved. If no insurance exists there are many budget friendly ways to birth a baby including midwifes and home delivery.



    Then there is the other side of the coin. Costs for unhealthy baby births can go through the roof. This can be applicable to both mom and baby. In one case, of which I am familiar, a healthy baby developed jaundice so severe she had to spend a few days in the NICU. After that she was just fine. Luckily mom and dad had decent healthy insurance and their out of pocket was not much.



    In this case I really like Dave Ramsey's advice on this subject. When momma gets pregnant pause some financial goals and save money. When mom and baby are home fine for a couple of weeks use that saved money to whatever financial goal you are then working. If needed having that extra cash helps alleviate some of the stress associated with a loved one being sick.



    There is no favorable tax treatment for the birthing of a baby specifically. All of it just falls under any favorable treatment for medical costs.



    You are best off saving money in a taxable account with mutual funds that are tax efficient. You want accounts that spin off little capital gains, or bond funds that might pay tax free.






    share|improve this answer



















    • 6





      "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

      – Mason Wheeler
      Feb 6 at 23:18














    11












    11








    11







    There aren't any.




    Of these significant, relatively predictable expenses




    I would not necessarily classify child birth cost as either significant or predictable.



    Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal vitamins are often prescribed so insurance will pay all or part of their cost. This does not happen with most adults with other conditions, but the vitamins have such a positive effect on outcomes, that it is acceptable practice by all involved. If no insurance exists there are many budget friendly ways to birth a baby including midwifes and home delivery.



    Then there is the other side of the coin. Costs for unhealthy baby births can go through the roof. This can be applicable to both mom and baby. In one case, of which I am familiar, a healthy baby developed jaundice so severe she had to spend a few days in the NICU. After that she was just fine. Luckily mom and dad had decent healthy insurance and their out of pocket was not much.



    In this case I really like Dave Ramsey's advice on this subject. When momma gets pregnant pause some financial goals and save money. When mom and baby are home fine for a couple of weeks use that saved money to whatever financial goal you are then working. If needed having that extra cash helps alleviate some of the stress associated with a loved one being sick.



    There is no favorable tax treatment for the birthing of a baby specifically. All of it just falls under any favorable treatment for medical costs.



    You are best off saving money in a taxable account with mutual funds that are tax efficient. You want accounts that spin off little capital gains, or bond funds that might pay tax free.






    share|improve this answer













    There aren't any.




    Of these significant, relatively predictable expenses




    I would not necessarily classify child birth cost as either significant or predictable.



    Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal vitamins are often prescribed so insurance will pay all or part of their cost. This does not happen with most adults with other conditions, but the vitamins have such a positive effect on outcomes, that it is acceptable practice by all involved. If no insurance exists there are many budget friendly ways to birth a baby including midwifes and home delivery.



    Then there is the other side of the coin. Costs for unhealthy baby births can go through the roof. This can be applicable to both mom and baby. In one case, of which I am familiar, a healthy baby developed jaundice so severe she had to spend a few days in the NICU. After that she was just fine. Luckily mom and dad had decent healthy insurance and their out of pocket was not much.



    In this case I really like Dave Ramsey's advice on this subject. When momma gets pregnant pause some financial goals and save money. When mom and baby are home fine for a couple of weeks use that saved money to whatever financial goal you are then working. If needed having that extra cash helps alleviate some of the stress associated with a loved one being sick.



    There is no favorable tax treatment for the birthing of a baby specifically. All of it just falls under any favorable treatment for medical costs.



    You are best off saving money in a taxable account with mutual funds that are tax efficient. You want accounts that spin off little capital gains, or bond funds that might pay tax free.







    share|improve this answer












    share|improve this answer



    share|improve this answer










    answered Feb 6 at 17:54









    Pete B.Pete B.

    51.8k13110163




    51.8k13110163








    • 6





      "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

      – Mason Wheeler
      Feb 6 at 23:18














    • 6





      "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

      – Mason Wheeler
      Feb 6 at 23:18








    6




    6





    "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

    – Mason Wheeler
    Feb 6 at 23:18





    "I would not necessarily classify child birth cost as ... significant" Then you're lucky. When my sister had her first kid, some doctor noticed some minor, inconsequential "problem" and whisked the baby off to the NICU, refusing to release him without some completely unnecessary tests that ended up costing around $10,000 to determine that there wasn't any real problem afterall. In any other context, this would be called extortion and possibly even a hostage situation, as she was not free to take her baby and leave without the expensive tests, but apparently hospitals can get away with it!

    – Mason Wheeler
    Feb 6 at 23:18













    12














    If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money.



    You may decide that in the year the child is born to pick a non-high deductible plan, but because the money on the HSA doesn't expire you can then use the money in the HSA even if you don't currently have a qualifying high deductible plan.






    share|improve this answer




























      12














      If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money.



      You may decide that in the year the child is born to pick a non-high deductible plan, but because the money on the HSA doesn't expire you can then use the money in the HSA even if you don't currently have a qualifying high deductible plan.






      share|improve this answer


























        12












        12








        12







        If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money.



        You may decide that in the year the child is born to pick a non-high deductible plan, but because the money on the HSA doesn't expire you can then use the money in the HSA even if you don't currently have a qualifying high deductible plan.






        share|improve this answer













        If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money.



        You may decide that in the year the child is born to pick a non-high deductible plan, but because the money on the HSA doesn't expire you can then use the money in the HSA even if you don't currently have a qualifying high deductible plan.







        share|improve this answer












        share|improve this answer



        share|improve this answer










        answered Feb 6 at 17:54









        mhoran_psprepmhoran_psprep

        69.4k896175




        69.4k896175






























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