PARENTS who can afford to save their Child Tax Credit every year until kids turn 18 could amass some serious cash for their children's retirement.
The Child Tax Credit has been expanded for 2021, with parents getting $3,000 for children six to 17 and $3,600 for children under the age of six.
However, the Child Tax Credit is normally $2,000 per child.
CNBC crunched the numbers to see how much parents could put away for their kids' futures if they invested the $2,000 every year until a child's 18th birthday.
To come up with the amount, CNBC assumed that $2,000 was being put away every year for 18 years, the recipients weren't touching the account until they retire at age 67, and factored in a 6 percent annual return.
Putting away $2,000 every year would equate to $36,000 in savings.
If the retirement fund is used how it is intended to be, and the recipient does not touch the funds for 49 years, with the annual return, those savings will grow to more than $1.1million for retirement.
The outlet points out that some additional economic factors need to be considered when thinking about these numbers.
The number-crunching didn't take taxes, fees, or inflation into account.
Tax laws also change regularly, so the $2,000 Child Tax Credit is not guaranteed.
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It could be lower or it could be higher like it is for 2021.
The Child Tax Credit checks for 2021 began going out on July 15.
Qualifying families will receive the funds in recurring payments of $300 or $250 every month until the end of the year.
The remainder of the credit will be issued when the family files their 2021 tax returns.
Families can choose to opt out of the payments and receive the full tax credit next year if they wish.
The IRS has launched an online portal called the Child Tax Credit Update to allow families to stop the monthly payments.
Through this app, families can also update their information to ensure that they are receiving the full amount they are owed.
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