Consider this savings opportunity if a child or grandchild has a summer job

You can contribute to a Roth IRA for him or her…up to $5,500 for 2018, but not more than the child’s earnings. Inside the Roth, earnings grow tax-free. The payin counts toward your $15,000 gift tax exclusion ($30,000 if married).

There are key tax benefits to Roths. All distributions made after age 59% are nontaxable. Contributions to Roths can be pulled out free of tax at any time. And when the child is ready to buy his or her first home, $10,000 of earnings can be taken out tax-free. See IRS Publications 590-A and 590-B for more details.


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