As long as your child has earned income, he or she may contribute to an IRA – regardless of age. Let’s pause for a moment and think about this…Do you pay your minor children or grandchildren to work in your business? If so, these funds or a portion may be added to an IRA and used as a savings vehicle. Wow!!

There are two types of IRAs for children: traditional & Roth.

Traditional IRA – you pay taxes when you withdraw the funds at retirement. The contributions and interest accrued are pre-tax. Required minimum distributions begin at age 59 1/2.

Roth IRA – you pay taxes on the funds upfront. The contributions and interest are after-tax funds. No minimum required distributions.

Opening an IRA for your children and grandchildren is a great way to build wealth and save for retirement. Plus, you can teach your children how to save and show them the benefits.

Want to learn more? Schedule a consultation call.

The post IRAs: Retirement Tool For Children appeared first on T-Accounting & Tax Services LLC.