MONEYTALK with Al Suffrin
Can I open an IRA for my children?
What exactly is an IRA? And could I start one for my 5-year-old daughter? - Jump Start in Des Allemands Dear Jump Start: The acronym IRA stands for ďIndividual Retirement Account,Ē and an IRA is a great way to save for retirement. There are two types of IRA accounts.
Dear Jump Start: The acronym IRA stands for ďIndividual Retirement Account,Ē and an IRA is a great way to save for retirement. There are two types of IRA accounts.
The first is the old-fashioned deductible IRA, which lets you put aside $4,000 in pre-tax dollars and $5,000 if you are 50 years or older.
The earnings from your IRA investments arenít taxed until you start withdrawing the money during retirement.
However, you canít touch the money without penalties before age 59Ĺ.
The other choice is the Roth IRA. The Roth IRA allows you to put in up to $4,000 in after-tax dollars and $5,000 if you are 50 years or older.
Earnings from your Roth IRA are tax-free if the money stays in the account for at least 5 years and is withdrawn after age 59Ĺ.
The Roth IRA is attractive because earnings are tax-free. The deductible IRA has the advantage if using pre-tax dollars to fund the retirement account.
To fund an IRA, the person who owns the account must have earned income.
Earned income is from wages, salary, self-employment, etc. It is not from interest, dividends, rents, etc.
Therefore, you or someone would have to hire and pay your daughter for her to contribute to an IRA account.
The pay she would receive would have to be commensurate with the services she provides - therefore, you will be limited to what a 5-year-old could do for an employer.
Subscribe Today and Save!!!
St. Charles Herald-Guide is an award-winning newspaper that covers all aspects of St. Charles Parish - from schools and parish government news to social events, features on our local residents and sports.
Order your subscription today!
The St. Charles Parish Toy Drive delivered a day of games, food, toys and plenty of...
Officials in St. Charles Parish defend their own restrictions on pit bulls after...
Destrehanís football season came to an end Saturday night with a 23-7 loss to...
Donated toys and clothes are pouring in for a Montz family whose home was destroyed...
Due to a lack of evidence, a Luling man accused of killing his father is no longer...
The flu vaccine may not be as effective against this seasonís most dominant strain...
To take control of one's life requires courage. Ms.Lucia specializes in depression, stress and anxiety disorders, parent-child relationships, and marital issues. Taking the first step is often the most difficult.
Turnovers plague Destrehan championship loss - 882 views
The Destrehan Wildcats fell 23-7 to the Acadiana Rams Friday (Dec. 13) in the Louisiana High School Athletic Associationís Class 5A football championship at the Mercedez-Benz Superdome.