My #1 Tip to Make Your Kid a Millionaire
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In this episode of the Sunlight Tax Podcast, I’m discussing the benefits of tax-advantaged savings for children, specifically focusing on a Roth IRA for kids. I explain how parents can open a custodial Roth IRA for their kids, the advantages of a Roth IRA, and the importance of teaching children about compound interest and financial literacy.
This episode also emphasizes the long-term benefits of starting early with investments and how this can empower the next generation financially.
Also mentioned in today’s episode:
00:00 Introduction to Tax-Advantaged Savings for Kids
05:42 Understanding Roth IRAs for Minors
10:32 Teaching Kids About Compound Interest and Financial Literacy
Takeaways
Open a custodial Roth IRA for your kids to save on taxes.
Kids can have a Roth IRA if they earn income.
Roth IRAs allow tax-free withdrawals in the future.
Teaching kids about money can empower them financially.
Compound interest can significantly grow investments over time.
Matching your child's earnings in an IRA is allowed.
Most kids will pay no taxes on their Roth IRA withdrawals.
Investing in index funds is a good strategy for kids.
Financial literacy is crucial for the next generation.
This is a great opportunity to teach kids about investments.
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Links:
Roth vs Traditional IRA: Does it even matter?
How to fund your IRA: Pay yourself first
Link to pre-order my book, Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed.
Link to pre-order my workbook, Taxes for Humans: The Workbook
Get your free visual guide to tax deductions