Dear Harry: My niece will be turning 21 next month. She is attending college with a bunch of financial aid. Her mother is a widow with very limited income. I want to teach her to start saving for retirement as early as possible. I see too many people in their 70s and 80s who are destitute. Unfortunately, my niece now spends every penny she can get her hands on. I think she can start to turn things around with a little encouragement and push by me. Will my gift affect her financial aid?

What Harry says: First of all, we must consider whether your niece is eligible for a Roth IRA contribution. Did she or will she have any earned income for the year? If not, no Roth contributions may be made even though they are not tax-deductible. However, if she will have earned income for the year, she may make a contribution limited to the lower of the earned income or $5,000. Money in retirement accounts (including Roth IRAs) is not considered in the determination of tuition financial aid. I think your objectives here are admirable, however you should consider other needs. Your niece will have other financial needs long before she nears retirement. She may very well need a boost after graduation. Her financial aid will possibly include loans in addition to outright grants. A gift that will take some of the repayment burden off her back could be far more helpful and meaningful. Do consider the possibility of holding that gift until she graduates. You can then be in a better position to evaluate what's most important. It's great for her to have such uncles and aunts!

Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-Red Cross.