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Posted: 6/30/2015 1:20:14 PM EDT
[#1]
Quoted:
I heard you can do this. That as they grow you can review it w/ them every year or so and show them the power of compouunding interest, even if it is just w/ an initiial investment of like $1k when they are very very young w/o any further deposits. How does oen go about doing this exactly? Contact Capital One Investing/Sharebuilder. Tell them you want to open a Custodial Roth IRA. http://wiki.fool.com/Rules_for_a_Custodial_Roth_IRA Should be what you need. |
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Posted: 6/30/2015 1:23:26 PM EDT
[#2]
The child must have earned income to be eligible to contribute.
Read the eligibility rules. |
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Posted: 6/30/2015 1:33:42 PM EDT
[#3]
Quote HistoryQuoted:
The child must have earned income to be eligible to contribute. Read the eligibility rules. Yup. Need to be making money first. |
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Posted: 6/30/2015 1:34:13 PM EDT
[#4]
Quote HistoryQuoted:
The child must have earned income to be eligible to contribute. Read the eligibility rules. okay, so for hte child to then add deposits as time goes buy said child has to have income. But... can a thrid party not make at least the initial deposit to open the acct for the child? Someone on some show, maybe wealth track, was suggesting this as a gift for when a child is newborn or maybe 2 yrs old or something... |
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Posted: 6/30/2015 9:31:31 PM EDT
[#5]
Unless the two year old has a job you cannot do it. Must be earned income, not interest income.So unless a 2yr old has baby acting job...
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Posted: 7/2/2015 11:16:16 AM EDT
[#6]
Quote HistoryQuoted:
okay, so for hte child to then add deposits as time goes buy said child has to have income. But... can a thrid party not make at least the initial deposit to open the acct for the child? Someone on some show, maybe wealth track, was suggesting this as a gift for when a child is newborn or maybe 2 yrs old or something... Quote HistoryQuoted:
Quoted:
The child must have earned income to be eligible to contribute. Read the eligibility rules. okay, so for hte child to then add deposits as time goes buy said child has to have income. But... can a thrid party not make at least the initial deposit to open the acct for the child? Someone on some show, maybe wealth track, was suggesting this as a gift for when a child is newborn or maybe 2 yrs old or something... Whatever show that was, you should stop watching it because they were wrong, except in the very rare chance that your 2 year old is making money (baby modeling or something). Read this. From the IRS: For 2014 and 2015, your total contributions to all of your traditional and Roth IRAs cannot be more than:
ETA: Even if your child gets a job when he's 12, you still can't contribute more than what he earns during that tax year. It doesn't matter if he puts his money in there, or you put your money in, but you can't put more than he has earned in the tax year. |
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Posted: 7/6/2015 12:17:39 PM EDT
[#7]
You may have misunderstood the show.
The closest thing you could do to that legally would be: Kid makes $500, you can contribute $500 to the kid's IRA. The kid won't have to make the actual contribution from the earned money, but kid must have earned income of at least the amount being put in to the account. You could always just do it in a taxable account in the child's name. With some proper planning the kid might even be able to pull of some tax free Tax Gain Harvesting for long term capital gains. |
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Posted: 7/9/2015 10:49:08 AM EDT
[#8]
OP: If your goal is to show compounding interest, why not a 529 or Coverdell ESA?
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