Personal Finance

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IRA for a child (lemmy.world)

submitted 1 year ago by [email protected] to c/[email protected]

18 comments fedilink hide all child comments

I've heard this is a good way to set your kid up for success and take advantage of compounding. One of the parts I always get caught up on when looking into it, is that your kid needs some form of taxable income, and whatever they contribute, you can match it.

If you have a child that is just a couple years old, how do you accomplish this? I can't just say I pay her $3000 a year for picking a book to read each night..or can I?

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[–] [email protected] 1 points 1 year ago (1 children)

I hope you find something that works for you.

I think the best advice I've heard is the airplane oxygen mask analogy. Make sure you're set before helping others. You don't want your kid to have a fully funded education and end up not being able to go because they're stuck taking care of you. So make sure you have your own retirement and insurance figured out before worrying about your kid's future.

[–] [email protected] 1 points 1 year ago

Yes, very good point. I've been following the /r/personalfinance flow chart for a while, and it more or less focuses on your own retirement/ savings first.