On Mar 29, 9:12 am, "Daniel T." <danie...[at]earthlink.net> wrote:
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It depends on how soon she will be on the job market. If it is a short
time, she should reduce her part time work and complete her education
early.

--
Ron

joetaxpayer wrote:
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I was about to say the same thing. Roth IRA is perfect.

She can take the principal out for emergencies or major purchases, but
there's a strong incentive not to because she can't put the money back.

I opened a Roth IRA for my teenage daughter a couple of years ago. At
first she thought I was crazy, but she is a math whiz and is beginning
to see what happens if she leaves it alone for 50 or 60 year.
Exponential curves are great if you give them enough time.

Bob

Until she graduates, I'd recommend she put the money first
in a Roth IRA; second, ask her if she thinks about buying a
house and review how much it will take for her given
geographical choice, then have her start saving in a money
market fund (or similar) for the house; third, maybe invest
outside the IRA for retirement. If she needs the Roth IRA
contributions at some point to buy a house, she can always
take them out. Though she needs to get clear that generally
she cannot put that money back into the IRA once it is
removed.

Maybe have her (instead of dear ol' dad) start lurking here.

"Daniel T." <daniel_t[at]earthlink.net> wrote
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Daniel T. wrote:

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She has a once in a lifetime opportunity to put away the annual $4000 in
a Roth IRA, and watch it grow for 50 years. If she discovers in a few
years, that she really made a mistake, that she wants to use the money
to buy a home, she can withdraw her deposits for no penalty or tax.
At just 8% return, she'd be on a path to having nearly $60K by age 31,
and over $600K by age 60 with no further deposits after the 10th year.
The magic of compounding.
JOE

On Mar 29, 10:12 am, "Daniel T." <danie...[at]earthlink.net> wrote:
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I dion't think a 20 yo would know where they will live in 3 years...
graduation and work could take an inifinite number of turns. In this
case, saving for a house should not be primary savings consideration.

Setting aside even $1000/year into an IRA (if they have earned income)
would pay much bigger dividends, IMO.

I have a daughter on the "Dave Ramsey plan" and I have a question.

Assuming she has no debts, is 20-21 years old, is working her way
through college, and she has six months expenses in savings. Should she
start investing in retirement, or start saving to buy a house? In either
case, what is the best place to park the money?