I don’t think we have a general thread for kid money stuff. Here it is!
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Just learned about these accounts and I have a seed-money eligible baby! Maybe you do too
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Some more info here that was helpful for me – it looks like contributions are after-tax but growth is tax-free, and the account converts to an IRA at 18. Basically seems like it’s a way to set up an IRA for a child without a requirement for the kid having earned income?
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Also, your employer can contribute to them, so if anyone here is in a position to give feedback to their work benefits person, it’s an avenue to consider.
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Innnnteresting!!
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I want to start an investment account for my kid as a birthday present. I have NO money, so initial contribution won’t be big. But I want to have it in place because I know two things-- time is the biggest factor, and introducing my kids to putting money into an investment account is a good idea. I can encourage it by starting it, right? I hope so. (I know I’m very late to the game and my kids should have had accounts since they were babies or something and no, we didn’t manage to do 529 plans for them so I suck but no time like the present, right?) So my question is, what kind of account do I start? Just regular investment, a Roth IRA, a traditional IRA? I know about the tax advantages of IRAs but they are for retirement and not accessible until 59.5, right? So do I want to set up something they can’t access until then? I don’t know.
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So IRAs require earned income…if your kid has earned income you could fund a Roth (I’d pick that over traditional, especially since Roth contributions can be withdrawn without penalty, it’s just the gains that have the wait) and just don’t put in more than they made, but if there’s not you’d have to go with a regular brokerage account. And <18 would have to be custodial in either case, I think, although I’m less familiar on that side.
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