To the thread: (public service announcement) ;-}
Just a thought: With Christmas just around the corner, I recommend that you consider establishing an IRA (preferably ROTH IRA) for your children or grandchildren. If you have a relative just starting a family, a high-schooler or college student who had a part-time or summer job this year, that person has earned income. Whether they saved it or spent it, they are entitled to contribute to an IRA to the extent of their earned income (not exceeding $2,000). YOU can help them set up the account, advise them, and make a donation for them. They must still report on their income tax filing, though.
I think it's an excellent way to encourage young people to start saving; to start to think long-term; and to provide them some additional 'insurance'. If it's done in a ROTH IRA, the entire proceeds 30-40 years from now will be tax-exempt. Over 36 years, $1000 invested at 8% compound return will yield $16,000; at 12% it would yield $64,000; and if they could get 18%, it would turn into $512,000.
An added benefit: You may get an idea of how well your potential heirs manage money for your estate purposes.
Just a suggestion. Alison and I have already done it for our 19-year-old son, and will be doing it for a couple of other deserving young people we know.
DELLish, bachman and alison |
