Kid Financials

[gottadobe]

I use the term kid loosely, he will be 23 in March.

DS completed an internship last summer wherein the company automatically enrolled him into a 401k (under 1k). He has received notice to take a distribution since it is less than required 1k.



We also have a Coverdell of less than 1K. He graduates in May so won't need this money for school.



The current 401k is with Fidelity, the Coverdell, Janus.



What is the best course of action to roll both of these into a retirement account of some kind that he can contribute to no matter his employer?

Stay with one of the above or open something with USAA or NFCU where he already has accounts? I'm trying not to make things terribly complicated for but can't seem to make this work in my brain. I only contribute to TSP so no experience with "outside" investing.

[dragon's breath]

I put this in the other thread, but want to add that I would not go with USAA or NFCU. They likely charge higher fees than the three I mention.

Dec 29, 2022 15:35:00 GMT -5 dragon's breath said:

Dec 29, 2022 15:01:11 GMT -5 @sameoldstory said:

He can open an IRA at Fidelity and roll the funds in to that.

Second this.  If he has, and likes, Fidelity, no reason to change, just roll it into an IRA there (two other good brokerages are Vanguard and Scwhab/TDA).  He does need earned income to contribute to the IRA, and there are limits (to deduct for taxes with traditional, and even to directly contribute to a Roth), but they are easy to figure out before he starts earning "big money".

[puppylove64]

I have USAA Roth and traditional IRA accounts and the fees are low, but they moved most of those accounts to outside companies. One of mine is now at Charles Schwab and I don’t like it. I recommend Vanguard. Fees are low and website is easy to manage. There may not be many funds for less than $1000 though.

[puppyluv]

Personally, i would tell him to take the distribution, pay the small amount of taxes, and open a Roth IRA with the rest. You can ipen a personal one with Fidelity. Then keep contributing to the Roth each year. that money now will continue to keep growing and wont be taxed when he takes it out in 40+ years. also you can take out contributions without a penalty so it like a small emergency fund if he ever needs it.

[gottadobe]

Thanks so much! He took care of it this morning - I appreciate the input!