It is a belief among some commentators that your children are not as financially aware as you, their parents. Whether you agree or disagree, and if that is the case, one of the best pieces of advice that you can give your children is the value of a Roth IRA. Teaching children how to invest in stocks, bonds, and mutual funds by using a Roth IRA is crucial to receiving the benefits of compounded interest.
As soon as your children start making money in a summer job, after high school or college, impress upon them the value of making regular contributions to a Roth IRA for their future, and help them set up an account. The considerable benefits of investing at age 20 to age 30 is significantly greater than if they invest twice as much at age 30 up to the time of retirement.
Compound interest is worth the effort and a Roth IRA is the vehicle to use for the investment. The importance of tax-free compounding coupled with the advantage of tax-free withdrawals is an incredible way for them to enjoy the kind of retirement lifestyle you will want them to have. Not only that, but not having to rely on anyone else for a secure and self-directed retirement is worth the small price one will pay to invest roughly $2000 a year.
It is always better to have several million dollars in retirement through the power of compound interest rather than to be reliant on Social Security that is going bankrupt from the baby boomer generation. Take the time now to secure yourself a wealthy retirement by investing in a Roth or self-directed IRA. You will not regret it when you have the retirement you always dreamed about. Living like no one else right now will guarantee you can live like no one else later.