Subconscious financial literacy - a Roth IRA for the working teenage niece/nephew

First, raise your stop by one point to 37.02 for FLIR.

In tonight's topic, one effective method of teaching the value of saving for a retirement account is when a teenage nephew or niece starts their first job. If the niece/nephew worked one full year, the aunt or uncle would open a savings or Roth IRA account in the child's name and contribute one year's gross income at the end of the year (subject to the annual maximum contributions). Each year, until the niece/nephew graduated college, the aunt or uncle would contribute to the account based on the amount of that year's earned income. Usually, most of the contributed money would be invested in money market interest accounts, but they would allow 20% of the contribution to go into an investment of the niece/nephew's choice.

Essentially, this was getting the niece/nephew practiced in what a 401k or 403b account does, which is matching contributions by a prospective employer. And understanding what the power of compounding can do to one's wealth. Something to think about, should I be lucky to be a "wealthy" uncle.