What the experts say

A retirement fund for your teen

No one is too young to start saving for retirement, said Carla Fried in Bloomberg.com. You can kick-start your children’s retirement security—and instill a habit of saving—by setting them up with a tax-free Roth IRA. If you “bankroll or subsidize an annual $2,000 Roth IRA contribution for five years” starting when your child (or grandchild) is 13, that seed money will eventually yield $10,000 of annual retirement income, according to investment firm T. Rowe Price. “You’re gifting 50 years of compound growth,” says financial planner Christine Fahlund. There are rules, however: While there is no minimum-age requirement for a Roth IRA, the child must have earned income “equal to the amount of a Roth contribution,” and investment or trust income doesn’t count. But if your teen earned $1,000 bagging groceries or babysitting last summer, either of you can contribute that amount to his Roth IRA.

Bargain stocks with value

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Even in this suffering stock market, “real bargains are surprisingly hard to come by,” said Susie Poppick in Money. But there are a few niches cheap enough to be tempting without posing a risk to your portfolio. First, look at technology stocks, which remain the best source of cheap growth. Some blue-chip multinationals have also become more than just safe bets. They offer a “cheaper way to gain exposure to the high-flying emerging markets.” Chevron, for example, is 14 percent cheaper than ExxonMobil and well positioned in the “fast-growing Asian and Latin American markets.” And consider medical equipment companies, which will profit from new health-care laws. In all three sectors, investors will find steep discounts and real value “with an added sense of security.”

More money for your nest egg

Uncle Sam will let you sock away a bit more for retirement next year, said Blake Ellis in CNNMoney.com. The cap on tax-free contributions to 401(k)s and other pension plans will increase by $500, to $17,000. It’s the first increase since 2009. “The reason? Rising inflation.” The higher cost of living has also led the IRS to increase the amount taxpayers can claim for personal exemptions by $100, to $3,800. The standard deduction for married couples will also increase, by $300, to $11,900; for singles, it will rise by $150, to $5,950.