Suze Orman suggests using a Roth IRA to make your kids millionaires by retirement, despite no tax deduction on contributions. Time is the key asset, with compound interest turning modest savings into over $1 million. A matching contribution from parents can help kids reach this goal more quickly.
Orman advises focusing on simple math to show kids how easy it can be to reach $1 million in savings. Teaching kids about investing and getting them interested in stocks early on is crucial. Orman recommends a mix of total stock market indexes and fractional shares of favorite companies like Apple.
Starting early and leveraging compound interest is the best way to build a big retirement account. Even modest sums, with a realistic rate of return, can easily push a Roth IRA balance to over $1 million over decades. Engaging kids while they are young sets them up for a comfortable retirement.
Read more at Yahoo Finance: Parents, Want Your Kids To Retire Rich? Suze Orman’s Got a (Retirement) Plan