The Ramsey Show

Podbit · The Ramsey Show

Change Your Mindset, Change Your Life

Explore episode Aug 7, 2026
Business
Gifting Roth IRA Contributions to Adult Kids — Creative Legacy Planning

Change Your Mindset, Change Your Life · Aug 7, 2026 Business

You can't open a Roth IRA for someone else, but you can give them up to $19,000 each (or $76,000 per family if both spouses give) and encourage them to fund it themselves. For a couple with $4.5M who doesn't need the money, cashing out a lousy annuity and giving the proceeds to adult children to max their Roths is a beautiful legacy move. But you may not live to see it spent.

6m 40s

Where this was said

Debbie in Jacksonville: Funding Adult Kids' Roth IRAs from an Annuity

At 1:08:50 · chapter starts 1:05:00

Debbie from Jacksonville is already retired, her husband is about to retire, and they have $4.5 million in net worth. She has a $120,000 annuity maturing next year that's earning almost nothing, and she wants to use it to fund her four adult children's Roth IRAs — partly because she wants to see them enjoy it while she's alive. Dave's verdict: cash out the annuity (it's a lousy insurance product), invest it in a good mutual fund as a separate decision, then figure out the giving. You can't write a check directly into someone else's Roth — you give them the money and they deposit it. Better still, each individual can gift $19,000 per person per year without gift tax — so a married couple can give nearly $80,000 to a married adult child. Rachel introduces the concept of 'Die With Zero' and asks whether a Roth is really the best vehicle to see the kids enjoy the money, since they won't touch it until 59½.

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