Why You Should Consider a Roth IRA for your Kids

Walkner CondonAdvice, Financial Planning, Investment Concepts0 Comments

roth ira
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Should your children be using a Roth IRA?

Wanting what is best for our children is one of the most basic tenants of being a parent. We preach safety and awareness on a daily basis, focusing all of our energies on raising well mannered and conscientious kids. As they grow into young adults, the lessons turn to making good decisions and being responsible. Most parents have a good handle on how to guide their young adults through the perils of high school and college. However, one area often missed is the need to start retirement savings as early as possible. It may sound crazy to think about retirement savings even before starting their first “real” job, but the impact of doing so can have a huge impact on retirement.  

Roth IRA’s are a fixture in most well-structured retirement plans. The problem is when they are established and funded. It is common for people to wait until their 30’s or 40’s before starting this popular savings vehicle. But did you know that earned income is the trigger for starting a Roth IRA? Therefore, when teenagers have jobs that produce earned income, they can start to enjoy all of the benefits of Roth IRA investing. The starting deposit and monthly or annual contribution are important but pale in comparison to when you start saving.

Teaching a young adult about the power of compounding interest and starting early is an incredibly important life lesson. As always, don’t hesitate to contact us if we can help with any of this.  

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