Graduation season leaves many wondering what to get the newlyminted grad. I have a suggestion: Give them the money they need tostart an IRA. It's the gift that keeps on giving.
This idea comes from a chapter in my latest book “Hey! What's My Number?” It alsostems from the frustration I felt every year my parents surprisedtheir grandkids with a savings bond. The idea was to teach the kidshow to save and invest. Now, we all know those savings bonds don'tyield much when it comes to long-term investing. In fact, becausethey're worth more to me from a sentimental standpoint than fromany measure of pecuniary value, I've never cashed in the savingsbonds I received as a kid.
Upon granting their grandkids the usual savings bond gift, I'dtell my parents if they wanted to teach the kids to save andinvest, give them shares in a long-term growth mutual fund. Itwasn't until I started writing “Hey! What's My Number?” that Irealized the true value of my comment. All my kids have had jobs asteenagers. In every case, I “encouraged” (as only a father can)them to max out on their IRA contribution. I don't know what's instore for them career-wise, but I do know giving them a head starton saving for retirement will benefit them in ways they may be tooyoung to appreciate right now. But, in 50 years, they'll know thewisdom of their old man. Maybe they'll even use it to help theirown grandkids.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.