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If you've got young kids/grandkids and looking for an alternative to the low rates of return or lousy risk/reward ratios on today's fixed income instruments, and you plan to have some money left over for kids/grandkids anyways, you can always fund their Roth IRAs, or establish their Roth IRAs, even if they do not have a full time job.

As long as they have earned income, which can be money from raking leaves, babysitting, etc, they can have a Roth IRA. If under age 18, its a custodial Roth IRA. Given that kids aged 8 or 9 could reasonably earn money raking leaves, it would not be unreasonable to start one for someone of that age. I'm not sure about how getting paid for "household chores" in the home they live in would fit in.

Previously, one did not need to have a W-2 or FICA contributions to have a Roth the IRS if you think this might have changed and see what they say. All they need in earned income.

Heartland Funds used to take $500 for the initial deposit to start one. If your child/grandchild only makes $250 a year from babysitting, you can make two contributions after Jan 1...$250 for 2011, and $250 for 2012 to meet Heartland's min deposit requirement.

If all this sounds like something you'd love to do but you're worried about the legality of it, consult your IRS. If your tax accountant autmatically says you can't do this, you may want to consider looking into yourself and finding a new accountant. And of course keep it truthful. You might not want to argue that your 3-year old made $6,000 plowing snow last winter.

I expect a few folks will jump on this and be critize this suggestion. I'm not going to respond to those comments. If interested, look into it for yourself.

Never did I ever think I'd be scraping ice off of a windshield in Alabama. Learn something new every day.
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