Planning Thought of the Day

| March 18, 2018
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Helping a young person fund an IRA—especially a Roth IRA—can be a great way to give them a head start on saving for retirement.

This is mainly due to the power of compounding over a longer the timeline and taking advantage of tax-free earnings.

While it may be easier to move mountains than to persuade a teenager with income from mowing lawns or babysitting (or in my daughters case working at a local cafe) to put part of it in a retirement account, gifting the contribution to an IRA on behalf of a child or grandchild can be the answer.

The contribution can’t exceed the amount the child actually earns, and even if you hit the maximum annual contribution amount of $5,500, that’s still well below the annual gift tax exemption ($15,000 per person in 2018).

 

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

 

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