Surprisingly, retirement isn’t just a consideration for the elderly. Several brokerages now provide Roth IRAs specially designed for those below 18. Yep, we’re talking about kids!
Here’s the deal: to access this, they must have their own income. Whether it’s from chores like mowing the lawn, watching the neighbor’s kids, or setting up a mini-business stand. Once they’ve got that “working income”, they, or someone for them, can contribute to the IRA.
What’s so special about this? Beginning early on these IRAs can unleash the benefits of compound growth. It’s like watching their modest savings multiply over time. Financial pros swear by this, with some even calling compounding “one of the most powerful forces in the universe.”
However, there’s some admin work involved. To ensure the IRS is satisfied, parents should maintain records of their child’s earnings and be aware of the maximum yearly contributions.
Keen to explore the nuances of Roth IRAs for youngsters? Check out the comprehensive article here.
