Author Topic: Teen investing?  (Read 2211 times)

Tom Bri

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Teen investing?
« on: August 08, 2016, 11:10:48 PM »
My kids have both expressed interest in opening investment accounts. Age 19 and 17. They both are planning to pay most college costs with scholarships (19-year-old got all but $3k for her freshman year) or family support. We will pick up any differences, so no loans.
I am basically thinking about normal, long-term investing, not special 'kid' programs like 529s, since more then likely they will not need the money specifically for college costs, and may want the $ for other things as they get older.
I am nearly completely naive about investing, to be honest, so am looking for some suggestions. Roths? Vanguard accounts? Will I need to be a custodial for the 17-year-old?

randymarsh

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Re: Teen investing?
« Reply #1 on: August 08, 2016, 11:15:33 PM »
If they have earned income (AKA a part time job), a Roth is probably the best. Their yearly income from part time work is likely low, therefore income tax is basically nothing. They can pay a super low rate, contribute to the Roth, then withdraw tax free later.

Tom Bri

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Re: Teen investing?
« Reply #2 on: August 08, 2016, 11:42:29 PM »
Each has about $4000 earned from work. If it's in a roth, it isn't available if they want to use it at some point, right?

RWD

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Re: Teen investing?
« Reply #3 on: August 09, 2016, 07:49:39 AM »
Each has about $4000 earned from work. If it's in a roth, it isn't available if they want to use it at some point, right?

Contributions to a Roth IRA can be withdrawn without penalty at any age. You just can't withdraw the gains without penalty until age 59.5.

Tom Bri

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Re: Teen investing?
« Reply #4 on: August 09, 2016, 12:33:03 PM »
Each has about $4000 earned from work. If it's in a roth, it isn't available if they want to use it at some point, right?

Contributions to a Roth IRA can be withdrawn without penalty at any age. You just can't withdraw the gains without penalty until age 59.5.

Ah. That's useful info! Thanks.

 

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