Ruprecht wrote:My 30+ yrs younger brother is intermittently employed. When he is, he contributes to a Roth IRA through Vanguard - no 401k or 403b with his kind of work, unfortunately. When he's not working (and this year looks to be another), he's not able to contribute to an IRA due to the IRS rules, and also doesn't have the money to contribute to any other sort of retirement savings. He's not even paying into social security while unemployed, which bothers me for his future.
--Off topic, but don't worry about SS in the future....its irrelevant for the planning now anyways.
I'd like to help him build some retirement savings. While he's working, I can make it possible for him to fully fund his IRA (which is still a pitiful sum in total, but at least it's something). When he's not working, what are my options? All I can think of at the moment is to gift him enough to open a taxable account in his name and then help him fund it each year. Are there any other options? I don't anticipate him going back to school, so I assume that makes a 529 unhelpful.
--You can gift up to 14k per year. Does he need retirement help or (more likely) a very large EF to save him from years of unemployment?Obviously you can mix these two.
If I do go with the taxable account, should I follow the usual advice about 100% stocks in taxable? He's unlikely to be paying any taxes anytime soon, but hopefully will be eventually. Even when he does, I doubt he'll be in a very high tax bracket. So on the one hand I hate using 100% stocks, but on the other hand I don't want him to deal with unforeseen tax problems later.
--I would be very conservative at first until he builds up some sort of next egg. MMF, IBonds, CDs. Then short term bond funds with a sprinkle of TSM or TISM.
--The LTCG tax in the 10, 15% bracket is zero.....so stocks are very useful in this sense. And I doubt the divdends being thrown off by CDs, etc would account for much tax.
If he has a taxable account, can I gift money directly into it, or does he have to do that?
--Cut him a check. Unless you fear he's using the money for other purposes.........
Thanks for any ideas, including suggestions for favorite Vanguard funds for this purpose.
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