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Never Too Early to Plan for Retirement

June 2nd, 2011, byMichelle Singletary

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Q: I wanted to share something I planned to do with my 15-year-old this summer. He will be working at his first full-time job as a counselor at camp. The plan is for him to put as much of his income as possible in a retirement account. After all, by the time he retires in 50 years, I imagine he may be totally on his own. I will give him money so he gets some enjoyment in return for his labors and the whole process isn’t totally horrible.

At first, he wasn’t sure, but when he saw how time and compound interest were his friends, he’s now all for it.

Curious about your thoughts on this plan.

A: First—just so others will know—your son would have to have earned income to contribute to an Individual Retirement Account. He can contribute to either a traditional IRA or a tax-free Roth IRA. The maximum contribution for either is $5,000.

I love that you have your son thinking about investing for retirement so early, especially since the best asset he has is time. The earlier he starts investing, the more he will have for retirement.

I have just one caveat. If you aren’t saving enough for his college education, you might have him put that money away for school instead. He’s getting close to that time, and his summer earnings could go a long way to pay for college expenses, such as books, especially if you haven’t managed to save enough.

But, if you’ve got college savings covered, as I said, it’s great to get him started on his retirement savings.

Last modified: June 2, 2011 at 4:21 pm