Make your teen a millionaire this summer

Gary Sidder set up Roth IRAs for his sons when they turned 13. Each year, the Littleton, Colorado, certified financial planner and his wife, Francie Steinzeig, a school psychologist, contributed an amount equal to whatever the two boys earned cutting lawns, shoveling snow and doing odd jobs. As the sons’ earnings increased, so did the parental contributions.

“Initially we started with $400, and now we do $5,500 for each,” the annual maximum allowable contribution, says Sidder, whose sons are 32 and 27. “Now that their accounts are worth more than $100,000 and $65,000, respectively, they do see the value of saving and starting early.”

Even if no further contributions are made, both sons could see their accounts top $1 million by retirement age, assuming conservative 7 percent average annual returns.

In my latest for the Associated Press, how setting up your kids with an IRA could pay off big dividends for their future.

Related Posts

  • Thursday’s need-to-know money news Today's top story: Stocks at a crossroads: 3 things to watch for in June. Also in the news: Why kids should stash summer job cash in a […]
  • 5 LAST-MINUTE MONEY MOVES BEFORE 2014 Okay, you’re on overload with all the last-minute shopping, cooking, preparing for guests and/or traveling. But try to squeeze in a few […]
  • 5 hacks to boost your retirement savings Many people have trouble saving anything for retirement. But I hear from a fair number of people who are looking beyond 401(k)s and IRAs […]
  • Young and broke? Open a Roth You young’uns, listen up. Roth IRAs are the best thing since sliced bread. And the best time to contribute is when you’re young and broke, […]

Speak Your Mind

*