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You can open a Roth individual retirement accounts (Roth IRA) at any age, but if you are a minor you will need the help of a parent or guardian to open a custodial account. Roth IRAs offer significant tax advantages that can help you grow your retirement nest egg, especially starting at an early age. Since there are no age limits for opening a Roth IRA, you might consider opening one as soon as you begin earning income.
Key Takeaways
- There are no age limits to open a Roth individual retirement account (Roth IRA).
- If you earn income, you can open an account.
- As a minor, parents must open a custodial account in the child’s name and control the investments until the child is an adult.
- Children pay low to no taxes, so contributing after-tax dollars when they are young allows them to reap the maximum benefits.
No Age Limits
Roth IRAs have no age limits for opening an account. As long as you have earned income for the year, you can contribute to a Roth IRA in your name.
Roth IRAs offer tax advantages in that you can make deposits with after-tax income, and then you can withdraw those funds, including any gains, in retirement without paying taxes. Children who earn income can sign up for a Roth IRA, but not independently. Until you are age 18, you must open a custodial Roth IRA with a parent or guardian if you want to take advantage of the tax benefits.
A custodial Roth IRA allows minors to contribute up to the maximum contribution limit for the year or 100% of their earnings, whichever is less. For the 2025 tax year, they can contribute up to $7,000.
To open a custodial Roth IRA, you may have to search a bit. Not all banks or brokerage firms offer custodial accounts. Once you choose a platform for your child’s account, you will need their Social Security number to sign them up. After that, you’ll just need to track their wages to determine how much they can contribute each year.
Note
The limit for a custodial Roth IRA is $7,000 for 2025.
What Is Earned Income?
Wages, salaries, bonuses, and self-employment income are all considered earned income.
For many children, self-employment income can be their entrance into the world of Roth IRAs. For example, if your child has a social media channel that generates income, they could use that income for a Roth IRA as long as they earn less than the yearly income restriction (phased out from $150,000 and $165,000 for 2025).
On a smaller scale, pay from jobs like babysitting, mowing lawns, or other entrepreneurial endeavors would count as earned income. If your family has a business, you may employ your child and pay them a fair market wage, which can then be invested.
Allowance or money for chores does not count as earned income. Ideally, the Internal Revenue Service (IRS) wants all earned income to be trackable, either by a 1099 or W-2 or with receipts of work provided, such as in the case of babysitting.
Benefits of a Roth IRA for Minors
If your child falls within the earned income category, then they stand to benefit from a Roth IRA. Since children typically fall within a very low tax bracket, they would invest their after-tax dollars at a low rate in their Roth IRA.
Given this fact, they will almost inevitably be in a higher tax bracket when they choose to withdraw money, whether they use the funds for a down payment on a house or wait until retirement age.
The ability to withdraw contributions at any time is also a benefit. This flexibility means they can use contributed funds from childhood to fund their education or dreams of homeownership.
Can I Contribute to My Child’s Roth Individual Retirement Account (Roth IRA)?
Yes. Parents, family friends, and relatives can contribute to a custodial Roth individual retirement account (Roth IRA) as long as their contributions don’t exceed the income of that the child earned in a year. Parents can contribute all or part of the available earned income amount. For example, if your child earned $3,000 by babysitting, then you or other family members can make contributions up to that amount.
Who Controls the Investments Within a Custodial Roth IRA?
As the person who opened the account, you ultimately control what investments are made until the child is age 18 or 21, depending on the state where you reside.
What Happens to the Custodial Account When They Come of Age?
Once the child reaches the age of 18 or 21, depending on the state, the custodial Roth IRA will transfer to the child and function as a normal Roth IRA. The child will then be able to contribute and withdraw as they see fit.
The Bottom Line
A major benefit of a Roth IRA is its flexibility, including the fact that it has no age requirements. If your child earns income, they can reap the benefits of this tax-advantaged plan.
In fact, children can benefit from contributions at the lowest possible tax bracket and begin to save early to reap the benefits of compound interest. Plus, introducing them early to the practice of saving and learning about investments can create lifelong habits that will serve them well.