Hacker News Reader

Comment by brian-armstrong | Hacker News Reader

And yet the contribution limits are hardly changing. And your options to contribute beyond the standard limit varies from employer to employer.

View on HN

Yep. If you want to retire on a 401k alone, you have to start putting money in it as close to the day you are born as possible.

If I get to have a kid I'm opening them a Roth IRA and putting all the money that I possibly can into it.

$10,000 on the day they are born would be somewhere in the $250,000 - $1,000,000 range (depending on whether they average 5% or 7%, and if it were to average 10% it would be $6.47 million at age 65), assuming no further investments were made on it and that there were no management fees attached to it, and that somehow they could resist the temptation to draw down from it early to buy a house or pay student loans, cover debts, etc..

Note that IRA contributions require earned income so IRAs are effectively unavailable to kids until they're in their teens.

I don't think you can do the IRA, but yeah, this is the way to do it. Event if you put just a few hundred in per month, it'll grow to a sizeable amount in 65 years. That means if your kids never put in more than the company match, they'll still have a pretty decent amount at retirement and have more money each month for rent or house payment.

I will speak with a CFP/CFA before I go about willy-nilly throwing sizeable amounts of money at something. I would probably also put the account into a trust that would prevent them from drawing down until they are 55 unless they are injured or otherwise have a desperate need that is more urgent than their retirement, like their child has an expensively treatable disease or something.

Because they want us constantly working not retiring.

Agreed, what's the limit on an IRA lately? 6k a year?

Reply on news.ycombinator.com