Roth IRA

Discussion in 'Air Force Academy - USAFA' started by navy, Jul 17, 2010.

  1. navy

    navy Member

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    I am interested in setting up and funding a Roth IRA for my cadet. Does anyone know the specifics, tax rules, amounts, best firms to use? Any thoughts on this would be appreciated. Thanks
     
  2. Gasdoc

    Gasdoc Member

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    We did this...earned income has to be equal to or greater than contribution. Max $5000 per year ($416.66/mo). Great way to help secure their future and cheap compared to what I pay in installments to a LAC for DD.
     
  3. bandit

    bandit Member

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    If they bank with USAA, which I highly recommend they do, then you can go ahead and setup the Roth IRA there.

    They will earn enough income in 2010 to fully fund the full $5000, assuming they stay the entire year.

    USAA has some great financial products and low fees. they are also very good about helping to educate the cadets about investment matters, should they decide to ask.

    Funds used to fund the Roth IRA do not have to come from the cadet, they just have to have enough earned income to cover whatever amount they put in, up to $5,000
     
  4. Stealth_81

    Stealth_81 Super Moderator Moderator Founding Member

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    Also, the cadets who took their Career Starter Loan through USAA were given a 5% match on their 2010 IRA contribution up to $5000 (for a maximum match of $250). The IRA account must be through USAA, also.

    Stealth_81
     
  5. blandy97

    blandy97 Banned

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    A Roth IRA allows you to put taxed income into the investment fund, let it grow free from taxes, and then withdraw it free from taxes when you reach the age of 59 ½. Find out if you are eligible for a Roth IRA. The income guidelines for Roth IRAs change from time to time, so check with the IRS or your investment bank to see if you qualify.Decide how much money you want to invest to begin with. Remember, the government does not require you to have a minimum amount in your Roth IRA, but most providers do. You can set up a Roth IRA with a bank, mutual-fund company, brokerage firm or insurance provider. Ask about fees before opening the account. Open your account provide and fill in the necessary forms. Choose beneficiaries. The first beneficiary is usually your spouse, but you can and should choose secondary beneficiaries. These are people who will receive any money still in the fund after you and your spouse have both died. Begin investing.
     
  6. blandy97

    blandy97 Banned

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    As an additional you just Keep careful track of the records you receive with your Roth IRA. You will need them at tax time. You can establish as many Roth IRAs as you wish, but your combined contributions cannot be more than the annual limits set by the IRS.Never set up a Roth IRA without designating a secondary beneficiary. Letting the money go to your estate can open it up to high estate taxes.
     
    Last edited by a moderator: Dec 21, 2010

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