Hey Grad! Consider Putting Aside Some Gift Money for Your Future

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Smart Ways to Use Your Grad Money for the Future

If you’re a new high school or college grad who received gifts of cash and checks, now’s the perfect time to make your money work for you. Instead of spending it all now, consider stashing some in savings. Even better, if you earn income this year, you can invest some in a Roth IRA to take advantage of a rare chance to grow your money tax-free for years—or even decades. Grad money growth!

Think of it as putting your grad money to work for your future self. For people with little income, a Roth IRA offers a unique opportunity to grow graduation gift money tax-free over time. Roth IRAs are long-term savings accounts that can benefit anyone, but especially people with limited income. They let you avoid taxes both when contributing and withdrawing.

You can make tax-free Roth IRA contributions if your taxable income is below $11,925 (single filers). And withdrawals from a Roth are always tax-free. The maximum you can contribute to a Roth IRA in 2025 is either $7,000 or your gross earnings for the year, whichever is less.

Smart Ways to Use Your Grad Money Wisely

Keep in mind that a Roth IRA is a retirement account, so there are restrictions on withdrawals. You can access your money at any time, but you’ll face taxes and penalties if you make any withdrawals before you are 59½ years old. An exception is that if you’ve had a Roth IRA for at least five years, you can withdraw up to $10,000 penalty-free for a first-time home purchase.

Through Trust and Estate Planning at Anthony J. Madonia & Associates, Ltd. we utilize the many tools are available that support various life stages and planning for the unexpected. takes a step-by-step approach to outline your goals and objectives, evaluate all possible options, and implement a plan that maximizes your interests and safeguards your legacy. Contact us to schedule a consultation.