Open A Retirement Account For Child

Basically a child s roth ira is one that you act as custodian for.

Open a retirement account for child.

Opening a roth ira for your child can be a great way to help your kid start planning for retirement as soon as possible. You may also need to serve as custodian of the account until your child turns 18 as brokerages generally don t allow minors to open their own accounts. If your adult child is eligible but not contributing because of lack of funds or just not concerned about saving for retirement you can give him or her the money each year. This account can be opened and managed by any adult parent grandparent aunt uncle family friend on behalf of a minor earning income.

That income can include money earned from self employment work babysitting shoveling snow walking dogs mowing lawns etc or formal employment. Open a custodial ira kids of any age can contribute to a retirement account like a roth ira as long as a parent or adult opens the account as. Fidelity roth ira for kids help a child invest for the future. Opening an ira for your child provides them not only a head start on saving for retirement but also valuable financial lessons.

A child ira works in the same way as regular ira except that there is a custodian overseeing the account says allison clago managing director investments at wedbush securities in los angeles. The custodian will have full control of the account until the child reaches a certain age. Just like with a custodial ira ugma and utma accounts are opened in a child s name and a custodian is named usually a parent or grandparent. Because your child is a minor they can t open their own account.

But you can choose anyone to manage the account. However as long as your kid meets eligibility requirements. Even a small ira can provide an introduction to investing and a. This includes tax free growth on your investments and tax free withdrawals at retirement.

It is possible to open an individual retirement account ira for a child. However there s one caveat. Here s how to open a retirement account for your child. A child must be earning their own income in order to open an ira.

At least one broker fidelity has.