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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode is dedicated to a conversation about strategies Black women can use to invest for their family’s future.

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Our take

Black moms may face barriers when it comes to building wealth for their families, but it’s still an attainable goal. One possible way is by using investing as a vehicle. Some moms aren’t in the financial position to invest for their retirement and put money away for their kids simultaneously. In this case, it can be a helpful strategy for parents to prioritize their retirement savings until they’re in a financial position to contribute for their kids, too.

Some strategies for prioritizing your retirement include saving money in a 401(k) plan, especially if your employer offers a match. An individual retirement account is another tax-saving place to stash money.

When it comes to saving for your kids’ future education needs, 529 college savings accounts can be a tax-efficient method. In 2024, if parents meet certain requirements, they can roll unused 529 funds into a Roth account as a result of the Secure Act 2.0. Even if parents don’t have much to contribute, they can start with small, regular contributions.

While Black moms may be at a disadvantage when it comes to building wealth, they can start from where they are. Having an investment strategy, prioritizing retirement savings and being consistent in their wealth-building efforts are steps to consider. Finally, an intangible gift Black moms can give their kids is financial education, which they can apply to their lives as they grow.

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