I thought I might suggest also looking into ibonds in case you weren't
aware of them. They protect the buying power of money and the interest
can be tax deferred until you cash them. They earn interest for up to
30 years, and can be cashed with no penalty after 5 years.

Anoop

"NW" <nowhere[at]noplace.com> wrote in message news:<chXHb.16781$tY5.5613[at]nwrdny01.gnilink.net> ...
- quote -

You also might check out things with H&R Block. (I know I'm biased since I
work for them part time and will probably get a lot of flack, but here goes
anyway....) They offer what is called an Express IRA. This can be done at
the same time you get your taxes done if you want. You can fund it from
your refund, by check or by monthly deposits. The account can be opened for
as little as a $300 initial deposit or a $0 initial deposit and monthly
deposits of as little as $25. As long as he has a minimum balance of $1000
or makes at least $25 monthly deposit there are no account maintenance fees,
otherwise the fee is only $25 a year. I know there are some places that he
would get a better rate of return, even on an FDIC insured account like this
one, but I like the low investment costs and the convenience factor. You
can find out more from your local H&R Block office or at this link:
http://www.hrblock.com/expressira/index.html

I do agree with one of the posters that a Roth would probably be the best
vehicle for your son at this point, especially if you think he is
disciplined enough leave the funds alone. Please let me know if you have
any other questions about IRA's in general or Express IRA's as I am very
well versed in both.

Kathy Morgan, EA
H&R Block Master Tax Advisor

"NW" <nowhere[at]noplace.com> wrote in message
news:chXHb.16781$tY5.5613[at]nwrdny01.gnilink.net...
- quote -

In article <chXHb.16781$tY5.5613[at]nwrdny01.gnilink.net> , "NW"
<nowhere[at]noplace.com> writes:

- quote -

Your son will have had income from employment in order to contribute to an IRA.
The way to go, IMVHO, would be to invest in a Roth IRA. It's likely your child
has very low income 'n', perhaps, no taxable income. Contributions to a Roth,
when taking qualified distributions, are never taxable. Contributions to a
traditional IRA are taxed on both interest and principal, when distributions
are taken. Contributions to a Roth may be taken out at any time without having
to pay tax or penalty. Premature distributions from a traditional IRA are
subject to both tax and penalty.

Shop around for the investment you believe will produce the greatest return.
$500 is sufficient to open an account in most investment firms and banks.

...
"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

On Mon, 29 Dec 2003 09:03:23 CST, "NW" <nowhere[at]noplace.com> wrote:

- quote -

I concede that I am probably in the minority on this, and also
acknowledge that the best savings vehicles vary from person to person,
but the general notion of IRAs for youngsters reminds me of my
generation's experiences.

Back when I was 21, my Dad sent me to his insurance agent for a
$10,000 whole life insurance policy. It was considered the mature
thing to do.

Like many of my cohorts, at the first blush of "financial need" (down
payment on house, child rearing expense, etc.) I surrendered the
policy for a cash value that was less than what I had paid in
premiums.

I hope the present young generation doesn't have the same experience -
invest long-term before short-term needs are met.


-HW "Skip" Weldon
Columbia, SC

My 18 year old son is starting to listen to my advice. He received some
cash for his birthday and would like to start investing in an IRA. Two
questions for the group...

Can anyone recommend or at least make me aware of funds that have a low
initial IRA investment requirement of $500 or less?

At his age and low income while in school, would a traditional IRA be the
way to go?


Thanks.