Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 06-06-2008, 07:40 AM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
Why Children Aged over 16 should make ROTH IRA Contributions?

Most taxpayers are quite aware with the benefits of ROTH IRA contributions and are familiar with the fact that ROTH IRA contributions can grow tax free and after meeting the required holding period, all distributions can be withdrawn tax-free.

But, what about the possibilities of a Child making a ROTH IRA contributions! The facts are quite amazing. Consider the Child aged 16 and over working a temporary job and making a $4,000 ROTH IRA contribution invested in a diversified mutual fund, that earns a historical rate of say 8% (over the next 45 years). At Age 60 the Child would have potentially accumulated an amount considerably over $100,000!

Just imagine a 16 year child working 2-3 Summers and earning enough to make a ROTH IRA contributions for those years, then at Age 60, the Child's accumulations in the ROTH IRA would amount to substantial amounts possibly in excess of $200,000!

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Can Hiring your Children aged under 18 save you taxes? TaxGuru For 2008 0 06-06-2008 07:20 AM
Can a child aged under 18 be subject to AMT tax? gimini Miscellaneous 1 05-22-2008 01:15 PM
Will the IRS allow me to make a contribution to both a SEP-IRA and a Roth IRA? disa IRA/Sep 1 02-05-2008 10:24 AM
Why IRA's for Children with earned income really make sense? TaxGuru General 0 01-26-2008 05:06 PM
IRS Guidelines for Roth IRA Contributions Samatg General 0 02-06-2007 12:07 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.