Just to make sure you understand this: if your income is less than $5500 this year, you can only contribute up to your net earnings (earnings - expenses). Your parents can fund the IRA for you, in part or in whole, but can't add more to push you over your earnings total. I.e., if your earnings were $2k, that is the max you can contribute.
Can you get a link to where it says parents can fund the IRA for me? I just want to make sure.
And the age-old question: Roth vs Traditional IRA? I know many argue Roth in my case because right now my tax rate is 0% ( I make less than the $6000+ or whatever is the minimum). But what about in the future when I get a minimum wage job to increase my income further? Or when I start getting (hopefully) paid internships in college, or an actual full-time job after college? Wouldn't traditional be the better choice? Or is Roth truly the way? And is that because of the aforementioned 0% tax rate?
Wouldn't it be better to go with a traditional, and slowly convert it over to Roth and cover the income using standard deductions? Or is my logic flawed somewhere?
Also (posted about this in my journal linked in my sig), we're closing a bank account in my name here in the PI which has approximately $4,000 in it and I want to put it straight to work. Should we wait till we're back on US soil to open a Vanguard custodial IRA? As I'm assuming there's paperwork to be had, and not sure if my SSN is something my dad has on had.
And regarding what exact fund, I'm split between the VTSMX (mutual fund) and VTI (etf). Besides account minmums, both of which I satisfy, the only difference I see is expense ratios, with VTIs 3x lower 0.05%. So shouldn't the logical thing be to go with the VTI? Or am I missing something else here? How about international exposure? Should that be something I should look into?
As long as you can estimate well what your earnings will be, you can contribute anytime between Jan 1, 2016 and Apr 15, 2017 for 2016. You can contribute all at once, or in chunks, or monthly, however you like.
Plan is to put the $4,000 all at once into whatever fund I/me+MMMforums/we decide. Then contribution as detailed below.
For the situation, the plan would be to any excess money I have into the IRA. Right now I'm saving $300/month for a senior trip to Alaska, so any money over that I'd put here.
How would this affect my parents tax filings? My mom also brought up the concern today for any financial need scholarships, which I quickly dismissed since my scholarship is merit-based but I thought I'd bring that up also. Ie; could opening up an IRA bring any negative/unforeseen effects or consequences into our lives?
And thank you very much, the plan is to continue to ask questions. That's all I have for now.