Comments on: Make Your Child a Multi-Millionaire Tax Free with a Roth IRA

By: John Coktostin

John Coktostin — Mon, 14 Feb 2011 20:18:02 +0000

That is a huge amount of money and an extremely good idea if you have the money to add to your child’s Roth IRA.

By: AAAA

AAAA — Mon, 08 Feb 2010 08:56:14 +0000

What if you hired your child for a modeling job? Perhaps take a picture of them and put it on your business card or shoot a video of them promoting your business feature it on your web site. Ever go to http://www.magicjack.com? The investor has an adorable video of his daughter talking about his latest invention! Just food for thought. You could pay them pretty well, and then stash it in their retirement account. I only wish I had parents that taught me all of this. Why aren’t we teaching this to our children in the schools? I would have taken all the money I made and stashed it in an IRA! But how many kids will actually keep that money in the account till they retire? If you can teach them to keep in there and never touch it perhaps it would work!

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By: Hank

Hank — Sat, 22 Nov 2008 17:21:47 +0000

Ritchell,

Thanks for the comment. You as the parent can only put the same amount of earned income into a child’s Roth IRA upto the max of $5,000 a year. So, even if you matched dollar for dollar as an incentive, your child must still earn at least $5,000 and not just $2,500 to max out a Roth even if the child is only contributing $2,500 to the pot of money. Hope this clarifies…

By: EK

EK — Wed, 19 Nov 2008 02:59:27 +0000

Great article, but I think we all know 10% annualized growth is not realistic….especially when relying on compounding each year on the additional 10% to achieve the number. The concept is right on…stash away cash and grow tax free. I would probably die of shock if taxes weren’t higher 30 years from now…

There is zero chance of compounding on consistent returns each year so it would be interesting to see a chart of up 30%, down 25%, up 4%, down whatever, etc.

By: Ritchell

Ritchell — Tue, 18 Nov 2008 23:13:51 +0000

Wouldn’t a child only have to earn $2,500 a year, since your matching brings it to a max contribution of $5,000. Also, can a 12 year old earn $2,500 in a year, and repeat that performance over 7 years consecutively? I’d want that kid as a business partner.

By: Financial Fellow

Financial Fellow — Tue, 18 Nov 2008 19:50:36 +0000

Good Article. I think it would also be prudent to form a corporation and hire your son/daughter in the process. From a paperwork accountability point of view. Starting at age 12 is a good idea. But why not give it a whirl when they are younger. Say age 9 or 10? Are there concerns that the government may challenge that?

By: Alex

Alex — Tue, 18 Nov 2008 18:40:33 +0000

Thanks for the great post; Thank god I’m nowhere near having kids yet, but man this is a great idea. Setting up something like how companies match your 401k input (at least for the time being) with your kid once they start earning seems to be a great idea. I wish my parents had thought of it.

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Finance Fiesta - Procrastination Edition! — Sat, 04 Oct 2008 04:18:23 +0000

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