Starting a Roth IRA for your kids

coins Starting a Roth IRA for your kidsDid you know that starting a Roth IRA or similar investment for your ten-year-old will pay off 24:1 assuming an average and reasonable investment return of 7%? It is true.

I just made a quick calculator to help explore the numbers. A few quick numbers from it are sure to open your eyes, as they have mine. $1000 invested at birth, netting 8% a year will be worth $178,000 at retirement. $4000 at age sixteen, perhaps from a summer job, would grow to $122,281 at retirement.

That’s just for one-time investments. What about if your child were to have $10 a month contributed to an account earning 7% starting at 12 years old, and continuing until retirement? $67,000 return on a total investment of $6360.

Enjoy the calculator, and start an account for your kids.

Article Inspiration: Free Money Finance

 

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