I hope this changes.
We gifted whatever amount our kids earned from jobs when they were in HS. It went into Roth IRA’s. Not a lot but compounding is too compelling. Just run the numbers. It’s eye opening. If you can afford to it makes too much sense.
And yes, both are financially savvy. They’ve managed their bank accounts since they started getting their birthday money as kids.
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UPDATE
I thought I would come back and share what happened.
Dh and I did make the offer, and ds2 was delighted that we did. We made the move in late May, I think, and it took until a couple of weeks ago to get to talk to him about moving the money into an appropriate fund. I loved talking through why some options are better than others, etc. And the main thing I wanted to accomplish has been accomplished – he talked about how he’s put money aside from each of his checks from his current contract job to make sure that he can make the max deposit in next year’s Roth. Yea! And this spurred him to make other moves, such as selling the bit of company stock he’s had in another account from his old employer. His income will be low enough this year that if he takes a tax hit this is the year to do it.
Anyway, thanks, all, for the input!
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UPDATE, no. 2:
Ds called tonight to see whether the offer to match his Roth contributions was still a thing, and I told him yes. He’s already got that money put aside to add to the retirement account so, to me, the plan worked. He definitely is now making a retirement account part of his expenses so I say this plan was a success. I told him that we’d match this year and maybe next year and then he was on his own. I’m really glad we did this, though the timing wasn’t great with the market but we can’t help that. I continue to be impressed how he is supporting himself doing something he loves while also pursuing a larger creative dream.
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Well - in reality, you should be happy for every bear market on the day you’re contributing! The worse the market, the more you’ll be making at the end.
The ONLY time “timing” matters is many years from now, when you approach the age where you plan to access the funds. And for that, you start a few years early, pick a year the feels “good enough” and switch a few years of prospective annual withdrawals into money market or into bonds that mature in those years - and then keep doing this every few years while there are still amounts left in stocks.
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That’s great! As the saying goes:
Time in the market beats timing the market.
He’s young; an index fund and regular contributions over time will work in his favor in the long run.
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I have said the same thing to my daughters. The point is not whether or not the market will be higher in 6 months. The point is that unless we have a MAJOR collapse the market will be higher in 40 years.
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