Roth IRA, Traditional IRA, 401K » minors http://www.iraroth.net IRA Questions and Answers Tue, 17 Jan 2012 00:09:43 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 How do Roth IRAs for minors work? http://www.iraroth.net/2010/04/how-do-roth-iras-for-minors-work/ http://www.iraroth.net/2010/04/how-do-roth-iras-for-minors-work/#comments Wed, 21 Apr 2010 16:03:06 +0000 admin http://www.iraroth.net/2010/04/how-do-roth-iras-for-minors-work/ I don’t completely understand exactly how they work at all, to be honest. But my math teacher recently showed us that contributing a couple thousand dollars a year every year for about 10 years at least 40 years before retiring could end up giving you over a million dollars upon retirement. Now, I see it’s not quite so simple. I have several questions….

1) Do taxes play any part in Roth IRAs? Or is it just you deposit, watch it grow by the rate, and then withdraw the exact amount?
2) Can a minor make an account? According to this – http://www.kiplinger.com/columns/drt/archive/2008/dt080130.html, it appears it is possible. However, it also seems that you need an income to put money into it. Would buying/selling misc. things (some virtual goods, others real goods) over the internet qualify as an income that I could cite if putting money into a Roth IRA?
3) How often is the interest compounded? Or does it vary?
4) What’s the rate? Or does it vary?
5) Are you guaranteed anything, or is it possible your money will all disappear?

]]> http://www.iraroth.net/2010/04/how-do-roth-iras-for-minors-work/feed/ 2 Do IRA and Roth IRA accounts have restrictions for minors? http://www.iraroth.net/2010/04/do-ira-and-roth-ira-accounts-have-restrictions-for-minors/ http://www.iraroth.net/2010/04/do-ira-and-roth-ira-accounts-have-restrictions-for-minors/#comments Fri, 16 Apr 2010 21:11:06 +0000 admin http://www.iraroth.net/2010/04/do-ira-and-roth-ira-accounts-have-restrictions-for-minors/ I understand the UTMA regulations for my state (Maryland), and the age of majority for equities is 21 for custodial and individual accounts. Do these regulations apply in the same manner to IRAs? What other restrictions would minors have in an IRA or Roth IRA, as limited by UTMA, brokers/firms, or other unforeseen limitations?

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