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The Truth About Protecting Your IRAs and 401(k)s by Steve Weisman

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Truth 18 Roth IRA for children

Setting up a Roth IRA for a child is my favorite use of this type of IRA, which has so many good aspects to it. With any investment, the longer you let the money compound, particularly if that growth is tax free, the greater the amount that you can accumulate. A child who contributes the maximum $5,000 per year from the age of 7 to the age of 18 and then never makes another contribution to her Roth IRA for the next 42 years will have accumulated $2,407,723 at age 60 assuming an 8% rate of return on the investments. Let’s see how to put this to work.

The requirements for a Roth IRA are the same for anyone. There is no minimum age for a person to establish a Roth IRA. The only requirements are that the ...

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