Roth IRA – The gift that keeps on giving!
I know receiving a new Roth IRA account as a gift may be a tad boring…at least when compared to say, a new iphone, but look at it this way – basically you are receiving an IOU for a new car/piece of property/house, etc when you turn 59.5! Does that make it more exciting?
Indeed a Roth IRA is a gift that will keep on giving but it has it’s limitations on who can receive it. The Roth IRA is a good option for young people who are just entering the work force.
A Roth IRA may be preferable gift to a traditional IRA because withdrawals of contributions (not earnings) are generally tax and penalty free. However, traditional IRAs could benefit people in certain income brackets since contributions may be tax deductible.
As with brokerage accounts, you’ll need personal information for the beneficiary if you’re opening a custodial account. Beneficiaries also need to earn a paycheck to be eligible.
