No. of Recommendations: 0
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
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.