Q: My daughter is 15 years old. She works for a small company ( 6hrs/week ie about $200/month). Company issues her pay check every month. She started a Roth IRA. Now I come to know company is issuing her 1099 not regular w-2 forms. Is she eligible for a Roth IRA. if not what action she has to take?

A: Your daughter is certainly eligible for a Roth IRA. She may contribute up to the amount earned in a given year. But she must also file a federal income tax return — even though she may not owe any taxes. Please consult with a tax preparer so that you file correctly.

Q: My company does not have a good 401k- they don’t contribute anything to it. Would it be smarter for me to put my money into an IRA or some other long term investment?

A: You should immediately open a Roth IRA, into which you can deposit up to $2,000 in after tax income. You may also be eligible for a conventional IRA since your company does not provide one. Please contact your bank, or a financial institution such as Charles Schwab, Fidelity or Vanguard for information on how to open up these accounts.

Q: Our 21 year old college student son will make over $2,000 from his summer job and would like to put it in an IRA. Can you advise us on some good funds for a person his age to consider?

A: Congratulations to your son on his financial wherewithal.

I would open up the ROTH IRA at Vanguard and put the cash into their S&P 500 fund. Another alternative is for your son to investigate some of the Fortune 500 companies and buy a few individual shares in one company. Following the fortunes of his company and learning to read the annual reports might interest him in money and create a vocation that will suit him and help him prosper for his entire life.

Jan. 1, 2005