Mininum contributions to new Roth IRA's.

[Guest Ruth Ayres]

I have two daughters presently in college and I would like to start a Roth IRA for them both. What is the mininum or maximun amount of money I would have to contribute on a monthly basis?

[Guest Matt Tuttle]

The minimum is dictated by whoever your IRA custodian is, the max is $2,000/yr. HOWEVER, they need to have enough earned income to dictate a contribution----so to make a $2,000 contribution they must have had income of $2,000 for the year.

Great idea if you can make it work out.

Matt Tuttle

203-609-9077

http://www.wealthadvisors.bigstep.com

[John G]

If you set up the custodial account and have an automatic monthly withdrawal from a checking account, you will often find very low minimums (like $50 or $100).

Another way to address this issue is to wait till next January when you can make both the 2000 and 2001 contributions. So if you can only put in $300 this year due to income limitations but expect to be able to add more next year, you may meet the minimum opening amount of many mutual funds and brokerages.

Keep an eye on the upcoming tax changes. Expect higher maximums in the future.