Open A Retirement Account For Child

Fidelity roth ira for kids help a child invest for the future.

Open a retirement account for child.

Because your child is a minor they can t open their own account. 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. It is possible to open an individual retirement account ira for a child.

A child must be earning their own income in order to open an ira. However as long as your kid meets eligibility requirements. Open a roth ira for kids. Opening a roth ira for your child can be a great way to help your kid start planning for retirement as soon as possible.

At least one broker fidelity has. 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. That income can include money earned from self employment work babysitting shoveling snow walking dogs mowing lawns etc or formal employment. This account can be opened and managed by any adult parent grandparent aunt uncle family friend on behalf of a minor earning income.

However there s one caveat. 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. 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. This includes tax free growth on your investments and tax free withdrawals at retirement.

Plus your kid will get all the benefits adults with roth iras get. But since an ira is an individual retirement account he or she would have to open his own account perhaps at fidelity or vanguard and make the investment. Opening an ira for your child provides them not only a head start on saving for retirement but also valuable financial lessons. But you can choose anyone to manage the account.

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