| No, Roth isn't the latest Parisian fashion designer or a | | | | and never again, assuming an 8% return, your child |
| chart-topping emo musician. Your child's gift list may | | | | will have over two million dollars at age 59.5, whether |
| look like the inventory of a big box electronics store | | | | they want to retire or not. Of course, if you invest in |
| or the where to buy section in the back of Vogue | | | | what you know with a self-directed Roth, that return |
| magazine, but nothing you can buy will brighten your | | | | could be much higher. |
| child's future like a Roth IRA. | | | | Self-directed Roths allow you to invest in what you |
| If your child made $5 mowing the neighbor's lawn in | | | | know - anything from John Deere tractors to |
| 2007, you can open a Roth IRA in their name. They | | | | apartment buildings to your local bar, not just stocks |
| must have some earned income from 2007, and | | | | and bonds. |
| household chores don't count. Investment income | | | | While most children (and adults) aren't too excited |
| doesn't count either, but if you are self-employed, | | | | about saving for retirement, you can remind your |
| you can hire your child to work for you and earn a | | | | child that once the Roth is 5 years old, and your child |
| salary. | | | | is 18, they can take some of the Roth IRA money |
| You can only contribute as much as your child | | | | out for a first time home purchase. (The money can |
| earned, up to $4,000 in 2007. You can open your | | | | also be used for unusual medical expenses, but that |
| child's 2007 Roth IRA anytime up to April 17, 2008. | | | | won't inspire them to save.) |
| Let's say your ten-year-old mowed many lawns and | | | | Remember, though, that once your child is 18 (in |
| shoveled many driveways, and earned $4,000 in | | | | most states), they gain complete control of the IRA. |
| 2007. You provided the added incentive for your | | | | This means they can choose to take the 10% tax |
| child's earnings by saying you would match whatever | | | | penalty and withdraw all that hard-earned money to |
| was earned and contribute it to a Roth IRA. Starting | | | | buy themselves a big box store or a fashion boutique |
| with that $4,000, if you contribute the maximum | | | | in Paris. Of course, you don't have to tell them about |
| (let's assume $5,000) every year until your child is 21, | | | | this option. We won't say a thing. |