Why 1417Power Exists
I understand how you feel, I felt the same. Then I looked into it in great detail. I checked with several experts* read books and did the math to find it all comes down to: Limits, Taxes and Time.
Limits: Roth IRA is limited to the lesser of your W-2 box 1 (earned income from a job) or $5,500. No job, no W-2, no Roth IRA. Catch up in later years is precluded because of the $5,500 annual limit.
Taxes: Issue 1) 1417Power pays a wage engineered to allow making significant contributions to your Roth IRA yet stay below the income tax threshold for a child that is reported as a dependent on their parents' tax return. Waiting until later in life most likely means your income will be taxed thus increasing the dollars you need to earn to make the same contribution.
Taxes: Issue 2) Roth IRAs are TAX EXEMPT. Save a million in a regular IRA or 401K and you get hit with income tax when you withdraw it. If you die there will be estate and income tax.
Time: Start a Roth IRA at age 14 and by age 70* you have 56 years of compounding. Start a Roth IRA at age 28** reduces it to 42 years. The 14 extra years increase the account value by 462%***. The difference is the power of compounding. If you don’t believe this read: “The Snowball: Warren Buffett and the Business of Life”.
The thing about time is... it happens while you research, investigate, and decide. Time is your friend and your enemy. To save you time we have completed the following studies:
1417Power versus 401K: http://www.1417power.com/home/Case_1.aspx
1417Power versus starting a child investment account: http://www.1417power.com/home/Case_2.aspx
1417Power versus starting a Roth IRA at age 19: http://www.1417power.com/home/Case_3.aspx
1417Power versus 529 Education Savings accounts: http://www.1417power.com/home/Case_4.aspx
1417Power versus child life insurance: http://www.1417power.com/home/Case_5.aspx
The 1417Power Program value proposition is compelling: Valuable life skills development, real work experience, building life changing wealth, and a letter of introduction and employment verification useful in college and employment applications. Also, money saved in a Roth IRA is exempt from FAFSA reporting.
I hope this helps you see why I am passionate about offering the 1417Power Program to as many people as possible. Those that enroll will know their children can have a comfortable retirement, those that pass up the opportunity and never reconsider may leave their children disadvantaged. If you know anyone with a child or grandchild under 18 please tell them about us.
You can receive a $50 referral reward visit: http://www.1417power.com/home/Referral.aspx
We are always ready and willing to develop a program that meets your goals and reflects your budget. Contact us anytime. If you have any question, please email me at paul@1417LLC.com or use: http://www.1417power.com/home/Contact_Us.aspx
Grandfather & Founder 1417Power
* Dave Ramsey, Mike Marotta, Jonathan Ping, my estate planner, my Morgan Stanley broker and several others
** 70 is the expected retirement age after 2030 "the National Commission on Retirement Policy favors raising the retirement age to 70 by 2029 and increasing it in the future by 2 months every 3 years." Social Security Bulletin - Vol 63 - No.4 - 2000.
*** Based on the S&P500 50-year historical annual rate of return. Past performance is not an indicator of future performance
**** According to the US Census Bureau less than 2% of 28-year olds have any retirement savings.