No. of Recommendations: 0
I am thinking of starting my 18 year old children with a small IRA. They both are in college and have part time jobs earning about $3k per year. They also both have small investment accounts that we started with about $3500 each in them.

So I was thinking of starting them off with a small IRA (about $500 per year) to get their retirement planning going early. I am considering going with a Roth IRA mainly because:
- their income level is so low, there is no tax benefit with a Traditional IRA
- The Roth is tax free at withdrawal time, when they will likely have a higher tax liability
- Funds can be withdrawn from a Roth IRA for home purchase if needed
- The ROTH IRA is more flexible than a traditional IRA in many other ways.

Any thoughts or comments on this?

It seems like a way to get them going towards a retirement plan, without easy access to the money (as in the investment account) except for a home purchase. In other words they can't simply pull the money out and buy a something :).

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.