When paying wages to children to work on the farm, also plan their retirement by starting a Roth-IRA.

Set up a Roth-IRA for your children, fund it annually (as long as you pay them wages and issue a W-2) and help start their retirement. The Roth-IRA grows-tax free and can be withdrawn tax-free after the child reaches age 59 ½.

Example: Farmer Joe hires son Scott and pays him annually for working around the farm. Joe pays Scott an average wage of $3,000.00 a year for 10 years and funds the Roth-IRA (maximum annual limit of $5,500.00 limited further by what amount is on the W-2) of $30,000.00 cumulative for 10 years.

Assuming the $30,000.00 grows to $40,000.00 by Scott’s 18th birthday, Scott puts no more money into his Roth-IRA, and the average annual return is 6%, Scott’s Roth-IRA will be worth approximately $460,000 at age 60. Now that’s worth starting!

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