Recently, a growing number of parents are seeking effective investment strategies that not only prepare for their own retirement but also secure their children's future. The aim is to provide a practical and sustainable financial foundation for their children when they reach adulthood.
On May 8, Samsung Asset Management announced the release of the new "KODEX Gift Guidebook," which proposes "ETF installment investing" as a long-term asset gifting method for children. The guidebook focuses on using the "periodic gift trust" system, which allows parents to regularly gift ETFs to their children. In celebration of Family Month, the guidebook aims to provide clear answers to questions parents may have.
The periodic gift trust system refers to a method where a fixed amount is gifted to a child on a regular monthly basis over a certain period. One way to utilize this is to gift assets within the tax-exempt limit in 10-year cycles, starting from birth. For children under 19, up to 20 million won can be gifted every 10 years; for adult children aged 19 and above, up to 50 million won can be gifted every 10 years. In total, parents can gift up to 140 million won tax-free until the child turns 31.
The KODEX Gift Guidebook provides guidance on how to use ETFs to build a practical and sustainable financial foundation for children. As intergenerational asset transfer becomes increasingly important, the guidebook goes beyond simple cash gifts and offers practical methods that also incorporate investment education. Topics covered include: the most effective ways to invest for children; why ETF investing is suitable for gifting; and an action plan for maximizing tax benefits when gifting to children.
Samsung Asset Management recommends KODEX US S&P500 and KODEX US Nasdaq100 as installment ETFs for children. These products are based on major US indices, have demonstrated long-term upward performance, and allow for risk management through diversification, making them highly regarded as ideal for long-term investing.
For those who find ETF gifting complicated or difficult, the guidebook provides a step-by-step breakdown from the preparation stage to the execution of gifting and investment. It offers detailed instructions from account opening to filing the gift tax report, making the process easy to follow.
Kim Dohyung, Head of ETF Consulting at Samsung Asset Management, stated, "Financial independence is one of the most important challenges your child will face in the future," adding, "The best legacy you can leave your child is the right investment habits and the assets that come from them." He also expressed hope that "this guidebook will provide many parents with insights into practical asset transfer and long-term investing."
The KODEX Gift Guidebook is available for free download by anyone without registration on the official Samsung Asset Management website. Samsung Asset Management plans to continue releasing a variety of investment content and guidebooks tailored to different life stages in the future.
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