Contributions to children (IRA, taxable, debt, tax)

[loves2read]

What is the best way to help adult children create investments that will grow and provide them some financial future aside from any they might receive from our estate?

Would starting an annuity for them at this stage with Vanguard which has low-fee, variable annuities that would grow tax free until they were 59 and half (but would be taxable) be something to consider?

Would it be more feasible to have them open a non-traditional Roth IRA and not fund the 401K/403b that might be available to them through their employers?

I thought initially we could just open a Roth for them but from what I have read if they max out their 401ks w/current employers then they can't open any Roth account---is that correct?

or can they still open the Roth that uses after tax contribution?

[cdelena]

The only thing that I ever found to really inspire my children was my retirement. They took notice that I was able to choose my own time, location, and terms because of my savings and investments. Two of the three have now asked for investment advice... the third is one of those individuals that will never save.

I am willing to put work (but not dollars) into helping them with their investments. I get them to first save enough to maximize the match in their employer 401K. Then get them to put the maximum into their Roth accounts. After those it is up to the individual to see if they put more into 401/IRA's or make taxable investments. Neither has one of the new Roth401K plans available to them at this time.

The tax regulations regarding retirement accounts vary depending upon the individual and their income level. A stock answer could be wrong but a little internet research should help you find the laws that apply to their current situation.

We usually have a talk whenever they want and I make suggestions regarding their portfolio and asset allocation. I have suggested investment models and tracking techniques that they use.

It has been a challenge to get the kids to start looking at retirement savings but finally, now in their thirties, they have.

[loves2read]

I just feel that even though my kids are hard workers the economy/world situation has changed so much since the early 70s when we graduated from college...I don't see the upside of their future and I truly am concerned about the US's ability to maintain its power/economic, social, military--after what Bush has done to this economy for the long-term---SO much debt that has not begun to be addressed, much less paid off...

I think there is a lot more inflation that is being reported and that it takes so much more money to sustain a decent life style than it did 15 years ago...

[cdelena]

I think you are reading some emotion and recent memories into your statistics. There have been very few years since real commerce began in this world and there is no reason to think it would not evolve continually.

The world economy is very different than in the past and will continue to change... it is now stronger than ever, will never look like the did which is good, and probably will be more different in the future than we can imagine now.

You may be mixing some politics into your post... lets not. This country and its place in the world will change and it is unreasonable to expect we would dominate for the long term any more than the British Empire, or the Roman Empire did.

IMO we can best serve our kids by providing an education (formal and informal) and fostering an attitude that you can succeed if you think, adapt, operate in an ethical way.