By Maurice Stouse, Branch Manager and Financial Advisor

Many people might wonder how their retirement savings would have been impacted had they had the opportunity, as a child, or a minor, to invest in a retirement account that would grow free of taxes, even when taken out or withdrawn. It is often heard and written that time is one of the most significant factors when investing. The longer the time the greater the potential impact on returns. That is due to compounding interest as well as being invested and not miss opportunities by being in the market on up days or when it’s rallying. Of course, that means being in the market when there’s a sell off as well. And don’t forget the potential impact of dollar cost averaging over time as well (systematic, periodic investing). Consider the influence of tax-free investing on an investment. This is

what the Roth IRA potentially offers. In the investing world there are usually three keys regarding tax efficiency: Tax reduction, tax deferral and tax free. Tax reduction strategies include tax deductible items like charitable contributions, tax deductible IRAs (or tax reduction through contributions to 401ks) or tax loss harvesting (selling certain at a loss to pair them with assets you realize a gain on). Tax deferral is often obtained through vehicles like retirement savings accounts and annuities. You pay taxes only upon withdrawals. Tax free investing can be achieved through things like municipal bonds and with the advent of the Roth IRA, a retirement account. Now consider that Roth IRAs are available to minors, Americans under the age of 18. For those who qualify, they can put money in to a Roth and have it grow tax free if held to retirement. Early withdrawals typically have a penalty but that can be waived in certain instances such as a first-time home purchase and some educational expenses. So, the thing to think about is the

combination of long term investing with tax free investing. To qualify, a minor would have to have earned income and have a parent or guardian have authority over the account until they reach majority. Many investment and or brokerage firms make this available today. Children, or minors can learn very early the advantages that saving, and investing might have for them in their lives. To learn more there are sites on line such as irakids.com and rothira.com. Or, call or visit with an advisor or brokerage firm today.

Maurice Stouse is a Financial Advisor and the Branch Manager of the First Florida Wealth Group and Raymond James and he resides in Grayton Beach. He has been in financial services for over 32 years. His main office is located at First Florida Bank, 2000 98 Palms Blvd, Destin, FL 32541. Branch offices in Niceville, Mary Esther, Miramar Beach, Freeport and Panama City. Phone: 850.654.8124. Email: Maurice.stouse@raymondjames.com.

Securities offered through Raymond JamesFinancial Services, Inc. Member FINRA/SIPC,and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the potential loss of principal. Investment advisoryservices are offered through Raymond James Financial Services Advisors, Inc. First Florida Wealth Group and First Florida Bank are not registered broker/dealers and are independent of Raymond James Financial Services. Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Information provided is general in nature and is not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. Changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Investing always involves risks and you may incur a profit or a loss. No investment strategy can guarantee success. Websites are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Looking at the Roth IRA for Kids Dollar cost averaging involves continuous investment in securities regardless of fluctuation in

price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets. 401(k) plans are long term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be

subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change. Investments in municipal securities may not be appropriate for all investors, particularly those who do not stand to benefit from the tax status of the investment. Municipal bond interest is not subject to federal income tax but may be subject to AMT, state or local taxes.

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