Open A Retirement Account For Child

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.

Open a retirement account for child.

Here s how to open a retirement account for your child. 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. 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. Opening a roth ira for your child can be a great way to help your kid start planning for retirement as soon as possible.

This account can be opened and managed by any adult parent grandparent aunt uncle family friend on behalf of a minor earning income. 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. Even a small ira can provide an introduction to investing and a. A child must be earning their own income in order to open an ira.

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. 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. Open a roth ira for kids.

Basically a child s roth ira is one that you act as custodian for. At least one broker fidelity has. It is possible to open an individual retirement account ira for a child. Because your child is a minor they can t open their own account.

This includes tax free growth on your investments and tax free withdrawals at retirement. However as long as your kid meets eligibility requirements. However there s one caveat. 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.