Should your kids be considering an IRA? According to a recent post on Marketwatch, maybe. The catch is that they need to have some form of earned income to qualify. When I worked during my summer vacation back in high school, I know I probably wouldn’t have wanted to save money for retirement. In hindsight, it may have been a really smart decision. The author of the post presented an interesting way for parents to encourage saving:
“You could even sweeten the pot a little by offering a “match” in the form of a little extra spending money.”
If your kid puts $100 into their Roth IRA every month, pay them back $50. That’ll provide a little incentive for them to save for the future. The whole point of the post was that having your kids open an IRA will give you a chance to teach them about investing. I fully support that cause. If you can talk your son or daughter into investing for their future, that’s awesome. Whether it’s in an IRA or some type of custodial account, you are exposing them to valuable experience. Just make sure they know the money is for the future. Also, be sure they’re contributing an amount that still allows them to enjoy their usual every day activities.