Millionaire Kids

Physician's Money Digest, November15 2003, Volume 10, Issue 21

Tip:

For children who have earned income,a Roth IRA can be the road to millions.With an 8% annual return, anannual $1000 contribution to a Roth willturn into more than $1 million over 60years (at which point all withdrawals willbe tax-free). Even short-termers do well—a 10-year-old who puts in $1000 a yearat 8% will have more than $10,600 tohelp pay college tuition when the timecomes. Any child who has a job that paysincome, whether it's mowing lawns orbabysitting, can open a Roth and kick inup to $3000 a year. If Junior balks atsocking all his hard-earned cash away,you can put the money in for him, up tothe amount of his earned income or$3000, whichever is lower.