Investment ?

[meltodd69]

Hopefully someone on here knows about IRA's and investments.

I heard several years ago if you invested just $100 in an IRA, when you were born, by the time you retired you would have a million. Is this true? Of course that was before this huge mess in this country.

Reason I am asking is we want to invest some money for my grandson. We were thinking IRA. Any thoughts on this subject? Any suggestions?

Oh and we would like to make it to where he can't touch it till he is a certain age.

We thought each year at Christmas we would add to it. Get him one or two little things and invest the big share of money we would have spent.

TIA

[SLance68]

You might want to put it in a 529 (I think that is the #) plan for his education. You can check this info out at either www.suzeormon.com or www.daveramsey.com

[ssgjeg]

Actually, couldn't you do both? I mean, at Christmas, divide the money between a 529 and an ira. That way, you would be saving for both his education and his retirement.

[Heidi]

My inlaws have bought my daughter a $50 savings bond which doubles to $100 after it matures for birthdays, etc. It's hard to say how much she's got, or going to have. I think it is a very wise decision. That will mean a lot more to her in the long run than a toy or an outfit.

[Renrut]

My inlaws have bought my daughter a $50 savings bond which doubles to $100 after it matures for birthdays, etc. It's hard to say how much she's got, or going to have. I think it is a very wise decision. That will mean a lot more to her in the long run than a toy or an outfit.

That is the same thing I do for holidays and birthdays for both my nephews. I get them a couple small things and then the savings bond.

[meltodd69]

A few nice suggestions. Thanks!
I forgot all about Saving Bonds. And I love the 529 idea.

[Bahet]

I would suggest starting a 529 or just a standard mutual fund for him. You can set it up as a trust that he isn't allowed to touch until he's 30 or any age you so choose. That way he can use it for a down payment on a house or needed family expenses instead of having to wait until he's in his 60s to access it. It would also make sure he doesn't blow it all on the things that teenage and early twentysomethings find "important" like a new sports car or beer and pizza.

[Kelsey1224]

The Facts

* There is no age requirement to open an IRA.
* Many, but not all, IRA providers will allow you to setup an IRA account for minors.
* The primary requirement is the child needs to have taxable earned income to make a contribution. So to make a $4,000 contribution, they would need $4,000 of income. Earned income means that dividend or interest payments don’t count.
* An important difference between IRAs and 529s is that once the child reaches 18 or so, they get complete control over the money and can do whatever they want with it.


What this means is that unless that child is earning money and you need the IRA as a tax deduction against those earnings...then you can't set up and IRA for a child. Savings bonds, purchasing stock certificates, 529 plans, etc. are the way to go.