Just wanted to pass along some valuable information in which I thought you may be interested. If your child is employed, they can contribute up to $4000 a year to a Roth IRA. The contributions are not tax deductible, but at their tax bracket it won't really matter. Just to put it in perspective, consider the following...
If they would put in $4000 a year between the ages of 16 and 21 and not another dime after that, and the Roth IRA earns 10% per year, the child would have well over $2 million dollars at age 65. $4000 may be alot to contribute at that early age, but even half of that and they would have over a million dollars. The Roth may earn less than 10% some years, but may earn even more in other years. The point is to try and have them save as much as possible to maximize their savings at retirement. And the best part about saving this money in a Roth, is that the money will be 100% tax free at retirement!
A great place to go for some financial calculators is
http://www.firstcommand.com/whereGo/calculatorlist.htm. Just search calculators on the home page.
Happy Investing.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment