paying children: RothIRA or 529?
912291
Lots of good advice, but if the children are only 7 & 4 you have to ask yourself if there is a valid deduction for your business.  You would have to be able to convince the taxman that they did actually do productive work.
27416
It depends on Age or how much time the person has.\n\nFor this year, I would say EWJ ishares Japan, but this is just my opinion. If you are young, then you worked very hard for that $. Go to Fidelity, and open up a Roth IRA, have the advisor take care of you...
1147141
At 23, time is your best friend (hooray compound interest).  Your best bet is to (if you haven't already,) open up and max out your Roth IRA.  This allows you to allow that compounding to work in a tax-free manner after you deposit. See what a difference that can make here: http://www.dinkytown.net/java/RothIRA.html\n\nIf you work for a company that provides matching funds for your 401(k) or similar retirement account, be sure to get the maximum match - it's free money! (that has to come from your income, but you can use your $10K to buffer your cost of living while you max your contributions).\n\nNote, it'll depend both on your capital gains, and the tax efficiency of your investments, but when I ran the numbers for myself, I found that I was much better off using my 401(k) for investment even though I plan on early withdrawal: http://randomfoo.net/blog/id/4087\n\n(Over a longer time-horizon, the tax efficiency is going to make a huge difference, plus you can also drastically rebalance with near impunity, tax free)\n\nRegardless of the type of account you put your money in, you still have to decide what you're going to invest in.  There aren't guaranteed returns, but for your goals (growth until eventual financial independence, yes?) you're best bet is probably a good index mutual fund. (You'll want to do your own research on this - although index funds are by definition 'average' they tend to provide total returns (after expenses) that beat the vast majority of mutual funds.  Here's one article to help you get started on why that's the case: http://www.fool.com/mutualfunds/indexfunds/indexfunds01.htm\n\nYour best course of action as you save towards financial independence is to continue investing (dollar cost averaging) and to diversify as your capital grows (bonds, international, REITs, metals) and to try to keep an eye towards what your goals are.  A good book on the subject matter is "You Money Or Your Life" by Domniguez and Robin, which talks less about investing (they suggest an extremely conservative approach), but more about a good basic mindset/framework for thinking about money.\n\nIf your goal is early retirement (reaching the point where you can live off your investments) you may also want to take a look at FIRECalc, an interesting early retirement calculator: http://fireseeker.com/ and the related Early Retirement forums (lurking and reading the archives is a good way to dip a toe in the water, so to speak): http://early-retirement.org/forums/
1163265
Do you have a rainy-day fund?  If not, I'd focus on saving money into a rainy-day fund in case you lose your job or your car needs work.\n\nWould the company match more if you put more into your 401-k?  If so, try to at least get all the company match.  Otherwise, consider a Roth IRA since you probably don't pay any income taxes anyway with two kids and their associated $1000 tax credit.  There's no point in trying to reduce taxes in a tax-deferred account if you don't pay any to begin with.
1078968
529 Plan, when the money comes out it is tax free, any mutual fund company you can have an automatic draft from your checking right too the account, so you know your saving.  You are able to contribute $11000.00 a year if you've  got it.  You are the owner, until you withdrawal for educational expenses.  Must go to educational expenses and only for family members so if one child doesn't use it you can transfer it to another.    There is also the Coverdell Ira that only allows $3000 a year contributions, same basic benefit, tax free on the way out.  I
1154996
As long as you are claiming the kids as dependents there is no problem using HSA funds for your kids medical expenses.  Make sure you keep track of the withdrawals and save the receipts just in case Uncle Sam wants to see them.  The easiest thing to do is use your HSA debit card.  Don't forget you can use those funds for other things like over the counter meds, dentists, orthodontist.  The IRS list of "qualified medical expenses" is pretty long.\n\nYou also mentioned that the kids are on your wife's group sponsored plan.  Many employers don't contribute to the family members premiums, and group insurance rates for kids can be pretty high.  You might want to look into putting your kids on an individual plan.  \n\nI do this frequently with my clients in Florida and the savings can be as much as $200-$300 per month.
142039
Go with a 529.  Great tax advantages.  You can then pick from a ton of investment choices to place inside of the 529.  For more info - http://www.529s.com
365288
I can suggest following things from my experience.\n\n1) 529 good option for college education\n2) UGMA or UTMA\n\nYou can obtain tons of information by searching on above fields. They have tax advantages depending upon your financial condition. Please remember, during financial aid calculation, kids name money taken into consideration. It is 35%.
855191
IRA's are only for wage earners, so unless your children have jobs, you can't open one.\n\nWhat you can do is open a broker account (Charles Schwab, Scott and Co., Merrill Lynch, and the like)for each child - Uniform Gift to Minors Account - and invest in high yield money market funds paying close to 8% versus CD's which pay 3-4%. You can make such contributions on a regular basis, or as circumstances permit. There is no set amount or timetable. \n\nThe earned dividends are not taxable to them until it amounts to $600 per year (check with the broker, I'm not sure of the amount.)\nAt age 18, the account belongs to the children and should be converted to their names.
1182485
Ahhh, the million dollar question for Roth accounts...\n\nAnd the answer is - it depends (sorry). Unfortunately, you need a crystal ball for this one. Your decision will likely come down to what you believe the future holds. You need to consider several factors, but you basically have two courses of action to take. \n\n1) Take the sure thing - Contribute to your Roth 401(k), paying tax upon the contributions at your current income tax bracket.\n\n2) Let it Ride - Contribute to your Regular 401(k), defer taxes upon that income, and enjoy tax-free compounding of interest until you are able to take a qualified distribution (usually at retirement) at which time you will pay taxes on the principal and earnings at your future income tax rate.\n\nI suppose a third option would be to hedge your bets and contribute some money to both accounts so that you have some tax-related diversification in your retirement account (but let's not get that technical).\n\nSo, look into your crystal ball...\n\nDo you believe that you will be in a higher tax bracket at retirement age than you are right now? If so, the Roth option may be the right choice for you as you will likely pay less in tax today than you would years from now in retirement. Likewise, if you believe you will be in a lower tax bracket in retirement, it makes more sense to simply contribute to your Regular 401(k), enjoy your tax deferral over the years, and pay the piper upon retirement.\n\nThere are several wild cards to consider in this scenario, not the least of which is the possibility that tax brackets change. If you want my honest opinion, I think it is naive to assume that the historically low tax brackets we enjoy today will be around in 20 or 30 years. I am 31 years old and, without getting political, just look at the current landscape of our country and its budget deficits. The cost of wars, strains on social security from aging baby boomers, etc, leads me to believe that the government is mortgaging our nation's current problems and our generation will likely have to pay for it. And how will we pay for it? Higher taxes. All things being equal, if I were you and I had more than 15 years or so until retirement, I would opt for the Roth 401(k).\n\nBy the way...depending upon your plan's provisions, if your employer matches contributions to your Regular 401(k) plan, then you should still qualify for the match, regardless of whether you contribute to the Roth 401(k) or your Regular 401(k).  I think some of the other answerers on here were getting confused by your question - comparing a Roth IRA (not a Roth 401(k)) with a Regular 401(k).
252767
If you have the cash I think the pre-paid account is a good deal.  I did the 5 year plan, but if I had it to do over again I would do the lump sum and get another year when I had enough for it.  The problem with the 5 year and extended payments is that the interest rate is 7.5 or 8%.  So I am paying mine off as quickly as possible.  \nI would get two or three years through the pre-paid plan and invest any extra money in a 529 plan and keep it in a pretty aggressive stock fund until the kid is in college.
559652
Roth IRA eligibility phases out at the following levels:\n\n    * $150,000 to $160,000: Married Filing Jointly\n    * $0 to $10,000: Married Filing Separately (and you lived with your spouse at any time during the year)\n    * $95,000 to $110,000: Single, Head of Household or Married Filing Separately (and you did not live with your spouse)\n\nGenerally speaking, a Roth IRA is the best option for *most* people, since it allows for tax-free withdrawals.  This tends to outweigh the up-front tax benefits of the traditional IRA for most people.\n\nAs for where to open your Roth IRA account, Vanguard, T Rowe Price and Fidelity all have large families of no-load funds that you can use to best fit your risk tolerance.\n\nBefore you do any of this, I'd suggest that you make a small investment in a book which will give you a solid foundation on how to invest your money.  The one I generally give to high school graduates, college graduates and newlyweds is "The Only Investment Guide You'll Ever Need" by Andrew Tobias.  It actually comes close to living up to its billing and it's an easy read.\n\nIf you'd like to learn more or get other recommendations on how to educate yourself more, click on my name and send me a note.
242442
401K plans are used as an incentive to stay at the company just like when they chip in for medical expenses.  The company may not trust the under 21 crowd if they are having problems with job hoppers.  It can really be a headache for those running the 401K plan.  If they have that policy, ask them why it's like that.  You can start a tax free ROTH at 18 if you want to wait.
84180
IRS Publicaiion 529 and Publication 17
819715
When you pay a babysitter (who is not your spouse, parent of the child, dependent, or one of your children under 19) or a child care center to watch your dependent children who are under 13 because you work or are going to school or are looking for work, then the amount you pay may give you a credit on your tax return called a Child Tax Credit.  If you are married and your spouse doesn't work, then you won't get the credit.\n\nThe amount of credit depends on how many children, how much you paid, your tax liability, and your adjusted gross income.  You definitely don't "get all the money back", but you can get a substantial amount back.  It never hurts to apply for the credit.\n\nOne big thing you need is the name of the care provider, their SSN or EIN (if they are a business), and their address.  You can still file for the credit if they refuse to give you their SSN, but it is much easier if you get their SSN.  Why do you need all of this?  Whatever you tell the IRS you paid the babysitter, the babysitter will have to claim as income on their return.  If their numbers they report to the IRS are different than what you report, the IRS will send out letters asking for the correct number.  It is for this reason that many of my clients refuse to report the payments.  That is unfortunately because regardless if you tell the IRS you paid someone for daycare, it is the responsibility for the baby sitter to claim the income.  Not doing so is fraud.  Tax avoidance on your "first job" is not a good way to start a life.  Besides, depending on other factors in the babysitter's life, their tax burden may be very low.  The income, in some cases, may actually qualify them for so much tax credit that they not only end up not owing the IRS any money, they get money back from the IRS.  Why?  If they have children of their own, the Earned Income Credit can more than offset SE taxes and income taxes.\n\nBottom line is, go ahead and claim the credit.  Make sure your baby sitter knows what you are doing and make sure they know that they may need to claim that income on their own return.  They may not have to file if the amount is small, but that is their concern, not your.\n\nGood luck!
84014
A 457 is a state sponsored retirement plan, and 403(b)'s are generally for not-for-profits.  I would suggest a regular old 401(k) even if you are a NFP, as the advantages are numberous, ranging from avoiding annuity wrapper fees to transportability of assets.  Look into it with someone qualified.  I don't know who is talking about 457 plans, they are probably not appropriate for you, and you're probably not even eligible to have one...might want to talk to someone else if someone mentioned that, unless you are a state agency or quasi-gov't entity.
1011254
Open up a 529 College Fund account. The sooner, the better.\n\nPut AS MUCH AS YOU CAN AFFORD each year (only YOU know what your finances are like).\n\nYou can't go wrong, no matter how much (or little) you put into it. Your fund is sure to grow after a few years of investing.