Safora
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| Investing for minors |
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Does anyone know off the top of your head, if you have to be over 18 to have an IRA in your name or can a minor have one?
Also do educational IRA's have to be used for college or can you set one up to pay for a bording school for your child.
I can reseach myself, I was just wondering if anyone has any experience with this.
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Thu Apr 20, 2006 2:37 pm |
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Martin
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Location: Houston, TX
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In case the previous answer is less than completely clear, as far as I know anyone with earned income can have an IRA. If you make less than the contribution limit, you cannot contribute more than 100% of earned income.
Educational IRAs can be used for any educational expense. In this they differe from 529 plans.
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Wed Apr 26, 2006 4:26 pm |
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Safora
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Cash: $ 13.80
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quote:
Originally posted by Martin
In case the previous answer is less than completely clear, as far as I know anyone with earned income can have an IRA. If you make less than the contribution limit, you cannot contribute more than 100% of earned income.
Educational IRAs can be used for any educational expense. In this they differe from 529 plans.
Thank you. That was much more clear.
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Wed Apr 26, 2006 5:29 pm |
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Martin
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Cash: $ 3.85
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Location: Houston, TX
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quote:
Originally posted by coaster
Martin, can we hire you to be the official muneepenee translator? 
I'd make a lousy translator, since I didn't attempt to read what he wrote. Thanks for the offer, though 
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Wed Apr 26, 2006 11:03 pm |
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Kiaser
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quote:
Originally posted by Martin
In case the previous answer is less than completely clear, as far as I know anyone with earned income can have an IRA. If you make less than the contribution limit, you cannot contribute more than 100% of earned income.
Educational IRAs can be used for any educational expense. In this they differe from 529 plans.
I second this. IRA's require that money contributed is earned income from the person the IRA is for. This is because IRA's are a tax-deferred law and the money needs to be tracked accordingly since you are given tax benefits not available with other common investments. So you can't contribute money into someone else's IRA (however, I'm sure you could do so if you "paid" your kid for various work on say a 1099).
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Wed Apr 26, 2006 11:05 pm |
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bong12187
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I second this. IRA's require that money contributed is earned income from the person the IRA is for. This is because IRA's are a tax-deferred law and the money needs to be tracked accordingly since you are given tax benefits not available with other common investments. So you can't contribute money into someone else's IRA (however, I'm sure you could do so if you "paid" your kid for various work on say a 1099).
Minors may contribute to an IRA (traditional or ROTH). No question about this. The problem most people are having is how to start it. There are not alot of companies out there that will start a minor with an IRA. One option is to start an IRA in a local bank. The yield will not be as high (or it could be if there is downturn in economy and we have a repeat of 2002-03) against playing it with stocks or mutual fund. However, by creating an IRA with a local bank, you may then roll the over to another fund once the minor turns 18. If the minor starts contributing 4k per year and he/she started at age 15, he/she will start with 12k (or more) more than someone who never got started at all.
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Fri May 05, 2006 3:26 am |
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