I'd like to start a retirement account for my 1-year-old daughter, but I don't want to use a custodial account. Are there any low-hassle options?

Joe Sharp, Rochester, N.Y.

We admire your long-term planning. However, there are no actual "retirement accounts" for the diaper set. Most planners recommend custodial accounts, because they allow you to manage assets on your child's behalf and offer the potential to have earnings taxed at a lower rate than if they were in the parent's name alone. Still not for you? You can save independently, experts say, by funneling the money into no-load, broadly diversified mutual funds or CDs. Then when your daughter is older and earning an income, you can contribute those savings to an IRA up to the yearly limit allowed by law, says Susan Hirshman, a financial planner and president of She Ltd., a financial-literacy consultancy firm. Of course, until that time, you'll have to take the annual tax hit.

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