Your child can save, too!

lawnmower-3Did you know that you can set up an IRA for minors? Setting up an IRA for your child or grandchild can be a very effective way to teach children about the principles of savings, financial management, and retirement. That first car or new laptop might look attractive to a kid, but even small contributions to an IRA will pay off in the long run. The only requirement to make a contribution to an IRA is earned income, even if it’s earned from mowing lawns or babysitting. For 2013, your child can contribute the lesser of

  1. Her earned income for the year or
  2. $5,500

You can set up either a traditional IRA or a tax-free Roth IRA —both accounts have the same contribution limits. And because these earnings compound tax-free, the accumulation of wealth over the course of your child’s lifetime is substantial. Schedule a meeting  with one of our Self Directed IRA experts for more details on setting up a self-directed IRA for your child.

Prohibited transactions in IRA