Establishing our Son's First ROTH IRA

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janne541
Posts: 3
Joined: Fri Jan 19, 2018 8:44 pm

Establishing our Son's First ROTH IRA

Post by janne541 » Sun Apr 14, 2019 11:41 am

Have a 20 year old already in the job market. We want to set him up with his first ROTH IRA. He prefers to deal with checks and cash rather than an automatic draw from his back accounts. Do you recommend a particular firm? While he is technologically savvy, he is definitely old-school in dealing with control of his money.

retire2022
Posts: 549
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Establishing our Son's First ROTH IRA

Post by retire2022 » Sun Apr 14, 2019 11:48 am

janne541 wrote:
Sun Apr 14, 2019 11:41 am
Have a 20 year old already in the job market. We want to set him up with his first ROTH IRA. He prefers to deal with checks and cash rather than an automatic draw from his back accounts. Do you recommend a particular firm? While he is technologically savvy, he is definitely old-school in dealing with control of his money.
Vanguard Target fund minimum is $1000 to get it started, I would select 2065 since he is 47 years away from retirement

https://investor.vanguard.com/mutual-fu ... fees/vlxvx

https://investor.vanguard.com/mutual-fu ... etirement/#/

edit:

here is how compound interest works over 47 years

$6000 x 47 years @ 6%= $1,533,387.17

http://www.moneychimp.com/calculator/co ... ulator.htm

here is how target funds work based on Pascal's Probability curve:

a good PBS news hour on this concept:

https://www.pbs.org/newshour/show/world ... half-story

video in case above is not available:

https://www.youtube.com/watch?v=gblX4Pzf3WU
Vanguard retirement calculator:

https://retirementplans.vanguard.com/VG ... ggCalc.jsf

Monte Carlo simulation aka target fund:

http://www.investopedia.com/terms/m/mon ... lation.asp

Bean machine & Quincunx probability:

https://en.wikipedia.org/wiki/Quincunx

https://en.wikipedia.org/wiki/Bean_machine

https://www.youtube.com/watch?v=AUSKTk9ENzg

How $14 dollars a day can become $1 million

https://www.morningstar.com/articles/88 ... r-day.html
Last edited by retire2022 on Sun Apr 14, 2019 12:07 pm, edited 3 times in total.

delamer
Posts: 7500
Joined: Tue Feb 08, 2011 6:13 pm

Re: Establishing our Son's First ROTH IRA

Post by delamer » Sun Apr 14, 2019 11:49 am

We set up Roths for our kids when they were teenagers.

The accounts are with Vanguard. We send a check each year for the annual contribution. No need to involve fund transfers from a bank.

Spirit Rider
Posts: 10313
Joined: Fri Mar 02, 2007 2:39 pm

Re: Establishing our Son's First ROTH IRA

Post by Spirit Rider » Sun Apr 14, 2019 11:53 am

Fidelity has no Roth IRA account or fund investment minimums. Schwab has no Roth IRA account minimum and just a $1 fund minimum. Both freely accept mailed in contributions.

retire2022
Posts: 549
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Establishing our Son's First ROTH IRA

Post by retire2022 » Sun Apr 14, 2019 11:59 am

Spirit Rider wrote:
Sun Apr 14, 2019 11:53 am
Fidelity has no Roth IRA account or fund investment minimums. Schwab has no Roth IRA account minimum and just a $1 fund minimum. Both freely accept mailed in contributions.
SpiritRider

Thanks for that classifier:

Which reminds, the child's income must be earned income, so if the child only earns a $1.00 that is the only amount they can submit to Fidelity and Schwab.

HomeStretch
Posts: 222
Joined: Thu Dec 27, 2018 3:06 pm

Re: Establishing our Son's First ROTH IRA

Post by HomeStretch » Sun Apr 14, 2019 1:20 pm

IRA contribution can also be made via mobile check deposit in the Fidelity app. The app allows you to specify contribution year. Contribution immediately shows in Roth IRA account.

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