10 May My daughter is getting a job. Can I help her with an IRA?

Q. My daughter is getting a job for the summer and I want to encourage her to save in an IRA. What’s the best way, with me offering matching funds, to make this happen?
— Mom

A. It’s great that you want to encourage your daughter to save for the future.

The more she saves now, the better.

You have some options.

You can gift her money for IRA contributions, but she would need to have earned income and it must not exceed the annual contribution limit per year, said Bill Connington of Connington Wealth Management in Paramus.

“The funds can come directly from you,” he said. “The annual contribution limit for 2023 is $6,500.”

As for how to go about it, she can open an IRA with any investment company and contribute to it and then you can directly contribute to that account, Connington said.

“Remember this money will not be able to be accessed until she reaches age 59 ½,” he said. “If needed beforehand there are penalties and taxes involved.”

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This story was originally published on May 10, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.