Before ruling out the Roth IRA I would point out it is just a container, and doesn't necessarily have to be used for long term investment even though that is the ideal use. Remember that early withdrawals are treated as contributions-first, and you can get back up to your total contributions without paying a penalty. Roth IRA space is generated with earned income, and if not used by the next tax day, is lost forever. By using a Roth IRA as a savings account or money market fund, if an emergency happens and it needs to be emptied, the only loss is the penalty on the interest. On the other hand, if by 25 he is on stable financial footing and hasn't touched the money, and maybe is even in a high tax bracket, it could then be moved to equities...