Teach Your Children (Part II)

One of the things we continue to hear from our younger clients is that you would like financial education for your kids. We introduced the RJ Life Goals tool in this space a couple of years ago (Finer Things - July 2018) which has some great resources.

The article linked at the bottom of the page has some further ideas and links that we like.

Our high-school seniors-to-be took a financial education class online recently which proved to be a fabulous “shelter at home” activity (they don’t always listen to their in-home professional). They are forming good habits…both came to me after wanting to open Roth IRAs with some of the money they have earned this year.

Our oldest son recently started a new job and reviewed his benefit package with me. As we looked over the 401k section, I suggested that he opt for the “Roth 401k” as the small amount of income tax he would pay now would be minimal compared to having his balance be available to him tax-free in 35 years. He questioned putting as much into the plan as I proposed at first. However, after his girlfriend heard me say that $200/month today would be “money spent” in your pocket, and saving diligently like this over time, you will have a high-six-figure balance in your 401k when you are 50… she chimed in, “That sounds pretty good!” He opted for the higher contribution.

Financial literacy is a lifelong journey. We all want to make smart decisions ourselves and want our children to be armed with the knowledge to do the same.

We hope that you are all staying healthy and safe!

Four Priceless Money Lessons for Kids

-Gary Weiss, August 2020

Any opinions are those of Gary Weiss, and not necessarily those of Raymond James.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Roth 401k(k) plans are long-term retirement savings vehicles.  Contributions to a Roth 401(k) are never tax deductible, but if certain conditions are met, distributions will be completely income tax free.  Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72.