Ask Terry Questions Roth ira investment for working eighteen year-old

Roth ira investment for working eighteen year-old

By Terry Savage on October 13, 2023 | Investments

My daughter who is 18 has her first job and is interested in opening a Roth Ira account. Do you have any suggestions where to invest or where to start?
Clueless parent

Terry Says

Good for her! I suggest she make it a “Roth” IRA, which means she does not get a deduction for her contribution, but all the money grows and comes out later tax-free.
Have her go to or and open a Roth IRA account. They will ask how she wants it invested. She should choose the S&P 500 Stock Index fund.
Tell her to keep investing regularly and never get scared if the market falls.
She can invest up to $6500 this year in an IRA– as long as she earns that much. But both Fidelity and Vanguard will let her open the account with a much lower amount if she signs up for automatic monthly contributions from her checking account.

PS. “Clueless” — if you’re working, you should do the same thing!!



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