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IRA's for Young People

RamRoddoc

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The Hen that laid the Golden Legos
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My son just got his first real job, temporary, until he finds a job in his specialty/career.

I discussed the need of investing early and want him to start an IRA. What would work better for him a traditional IRA, Roth IRA and if anyone has particular suggestions, I'm all ears.
 
Land. Start small at 5 acres and buy more later.

I've read lots of good things about the Roth, and most financial experts, such as Clark Howard, and Dave Ramsey also like the Roth and recommend them to young listeners all the time.

I'm no expert, so I listen to and read expert opinions. I don't know anything about traditional IRAs. The guys I listen to rarely discuss them...Now I have to wonder, why?
 
I would suggest that he follows the Dave Ramsey 7 Baby Steps.
1) $1K in savings as a emergency fund.
2) Pay off all dept except the house, paying smallest to largest owed.
3) Build up savings (from the $1k on step 1) 3-6 months of monthly expenses. This is now your emergency fund.
4, 5 & 6) Invest 15% total income into Roth IRA, 401k and any other investments to total 15%. Start paying down the house and savings for kids college funds (if applicable).
7) Become independent of debt.
 
I would suggest that he follows the Dave Ramsey 7 Baby Steps.
1) $1K in savings as a emergency fund.
2) Pay off all dept except the house, paying smallest to largest owed.
3) Build up savings (from the $1k on step 1) 3-6 months of monthly expenses. This is now your emergency fund.
4, 5 & 6) Invest 15% total income into Roth IRA, 401k and any other investments to total 15%. Start paying down the house and savings for kids college funds (if applicable).
7) Become independent of debt.
This all day every day. Financial peace university is the reason I’m debt free.
 
Once he gets his "real" job he needs to go all in on the 401k if his company offers a match.

After tax Roth is probably not the best thing as he is starting out. That's the after tax money he needs to live on.

But what do I know?

If you can instill an urgency to save as early on as possible ANY vehicle to do that is a good thing. Money compounds over time and the earlier you start the more you'll have when you get older.
 
Roth first and always at a young age. He'll be contributing after tax money when his rate is lowest it might ever be (hopefully). Unless the scum sucking pieces of shyt in DC change the rules (to be more fair for everyone, see?) he should be able to withdraw mostly tax free at retirement and is earnings in the fund aren't taxed allowing him to take advantage of growth.
 
Well assuming your son is 20, he needs a Roth account, and just invest in a 2060-2065 targeted retirement account with Vanguard, Fidelity, Schwab....very low expense costs.
When he gets a "real" job with a 401K, slam as much money into it as he can. Ramsey's plan is OK, but one size rarely fits all purposes. But his principles are sound, just tweak to fit your situation.
 
I would suggest that he follows the Dave Ramsey 7 Baby Steps.
1) $1K in savings as a emergency fund.
2) Pay off all dept except the house, paying smallest to largest owed.
3) Build up savings (from the $1k on step 1) 3-6 months of monthly expenses. This is now your emergency fund.
4, 5 & 6) Invest 15% total income into Roth IRA, 401k and any other investments to total 15%. Start paying down the house and savings for kids college funds (if applicable).
7) Become independent of debt.

This.

This all day every day. Financial peace university is the reason I’m debt free.

And this.
 
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