Starting retirement savings early is crucial for children's future financial independence and security. Opening an IRA for a teenager and having them contribute consistently from ages 13 to 18 could result in over $2 million saved by retirement age. Teaching children good financial habits like saving, earning, and spending wisely from a young age creates a foundation for lifelong financial well-being. Introducing concepts such as compound interest and encouraging age-appropriate jobs helps children understand the relationship between effort, income, and financial goals. With early financial literacy education, children will be empowered to make informed decisions to achieve a secure retirement and prosperous adulthood.

1. WEALTH MANAGEMENT
Fortune Favors the Prepared
by Oppenheimer & Co. Inc. August 10, 2023
Empowering Children for Financial Independence and Retirement Bliss
Did you know that your teenager has the opportunity to retire as a multimillionaire? According to Forbes, by instilling the discipline of consistent saving in an
Individual Retirement Account (IRA) from the age of 13 through high school graduation, and assuming a modest average return, that IRA could grow to over $2
million by the time your child reaches a retirement age of around 70.
Being able to understand and utilize this fact further emphasizes the power of starting retirement savings early for your children and the significance of teaching
children the value of consistent saving. By providing them with the tools and knowledge to save for their future, we open doors to financial abundance and security
throughout their lives. Teaching children the power of saving, earning, and spending is crucial for their financial education and it goes well beyond just short-term
goals.
By introducing the concept of saving early, we can help children develop strong saving habits that will benefit them throughout their lives. Teaching delayed
gratification, goal-setting, and prioritizing spending choices creates a balanced approach to managing money. Additionally, encouraging children to pursue earning
opportunities teaches them the correlation between effort, income, and financial independence.
Start with saving early:
It is important to remember that the earlier your child starts planning and saving for retirement, the more advantageous it is. Delaying the process will only require
them to have higher monthly investments. While it may be tempting for your child to enjoy their full income during their younger years, it becomes increasingly
challenging to set aside money each month as they grow older. Waiting too long might even force them to postpone their retirement altogether.
Let's consider a scenario where your child starts investing $100 per month in the market, with an average monthly return of 1% monthly or 12% annually,
compounded monthly, over a span of 40 years. Meanwhile, your child's friend, who is the same age, begins investing 30 years later and contributes $1,000 per
month for 10 years, also averaging a 1% monthly return or 12% annually, compounded monthly.
So, who will end up with more money saved? The friend will have accumulated approximately $230,000, while your child’s retirement account will exceed $1.17
million. Despite the friend investing more than ten times your child's monthly amount towards the end, the power of compound interest significantly boosts your
child's portfolio.
The importance of financial literacy:

2. Financial literacy is another essential part of teaching children about saving, earning, and spending. It equips them with the knowledge and skills needed to navigate
personal finance successfully.
Introducing financial concepts like budgeting, investing, and compounding interest to children may not be the most exciting topic for them, but it holds immense
value in helping them grasp the workings of money and the significance of wise financial decisions. By teaching these essential concepts, you equip your children
with knowledge and skills that will have a lasting impact on their lives. This early exposure only helps to prepare them for financial success, stability, and the ability to
make informed decisions that shape their financial future.
Encouraging earning opportunities:
It is important to encourage children to take on age-appropriate jobs or entrepreneurial endeavors. It not only teaches them the value of effort, income, and financial
independence, but it shows them how earning money can contribute to their financial well-being and aspirations.
The actions outlined above not only provide valuable lessons to teach your children about the power of smart financial habits, but also serve as building blocks for a
lifetime of financial well-being. By teaching and instilling these principles from an early age, you are nurturing a mindset of financial responsibility, discipline, and long-
term planning. This not only benefits their future retirement prospects, but also empowers them to navigate the financial complexities of adulthood with confidence
and make informed decisions that lead to a secure and prosperous future.
Need help achieving your financial goals? You can always reach out to your Oppenheimer Financial Professional who can help you take steps, using a variety of
financial tools, designed to create your personal retirement outlook
DISCLOSURE
The information provided herein is general in nature for informational purposes only and does not represent legal or tax advice. Oppenheimer & Co. Inc.
does not provide legal or tax advice. The material herein has been obtained from various sources believed to be reliable but does not purport to be a
complete statement of all material facts relating to the strategy or investments types discussed. Contact your legal or tax advisor for specific advice
regarding your circumstances.
Oppenheimer & Co. Inc. Transacts Business on all Principal Exchanges and Member SIPC.