new roth IRA’s for working grandkids
I have two grand kids in their 20’s and I want to give them some cash to open their first roth IRA’s and have them make monthly deposits into the account. Should we put the money in an index fund or search for a fund that historically has beaten the S/P thank you
Terry Says
They will do fine over the long run just being in an S&P 500 index fund. So make the check out to Vanguard or Fidelity and show them how to open a Roth IRA online at either of those websites. Caveat: They must have earned at least as much as they are contributing in order to open the account. It doesn’t matter where the money is coming from (from you) but it does matter that they will report earned income on a tax return for 2021.
And then have them set up an automatic deduction from their checking account into their IRA every month. Even $200/month can really add up over the years. If they say they cant afford it, tell them to look at their paycheck stubs. See that FICA deduction? It’s for Social Security. What will that be worth 50years from now?!! Better to have their own savings for retirement.
