YOUR MONEY
CREDIT, COLLEGE, TAXES AND REAL ESTATE
PRINT
EMAIL
DEL.ICIO.US
DIGG THIS- Ask Kim - Handling Debt After a Divorce
- Stock Watch - What GE's Miss Says About the Economy
- Fund Watch - For a Limited Time Only: A Legendary Manager
- Starting Out - Health Insurance for Twentysomethings
- Value Added - Six Stocks to Buy and Hold
- Cash in Hand - Pipeline to High Income
- Money Smart Kids - What We Learned From My Mother
- Drive Time - Guilt-Free SUV?
- On the Job - Making Work Fun
- More
This is for teenagers who had after-school or summer jobs last year flipping burgers, mowing lawns, babysitting or whatever. Why not start an individual retirement account and place part of your earnings into a great tax shelter?
You say you've already spent your money or, if not, the last thing you'd do is put it away for retirement 40 or 50 years down the road? Well, I don't blame you, but try this: Ask your parents, grandparents -- or maybe that doting uncle -- to help fund your IRA.
The law says you have to have earnings to have an IRA, but it doesn't say your own money has to go into the account.
Here's a tactic that might work: Remind your folks that by claiming you as a dependent, they save $850 in taxes -- if they're in the 25% bracket. And dazzle them with this fact: If they give that $850 for an IRA -- assuming you earned at least that much during 2005 -- it will grow to almost $100,000 over the 50 years until you retire ... assuming a 10% annual return over the long haul. If you use the Roth IRA, it will all be tax-free. Now, that's a tax shelter.
Reprint Article
|
|
|
|
|
