I also want to open an IRA to start my kids off right. My 16 year old only had earned income of $700 and the 19 year old has more. I do believe a Roth is the right way to go with them.

Roth's are no-brainers for the kids. With those incomes, they are in the 0% tax bracket, hence no advantage whatsoever with IRA's. But, as was mentioned, they can only contribute up to what they actually made if less than $3000.00 in 2003, $4000.00 in 2004.


Our tax rate is 15% so the tax savings isn't substantial.

This must mean your adjusted gross income is low, so that means you are eligible for a Roth in the first place. At 15% tax rate in your forties also makes the Roth quite attractive over the IRA cause you will probably be in a higher tax bracket 20 years from now. Plus, if you need to, you can get your contributions back early without a tax penalty.

- weitzhuis