With a Roth IRA, kids can save for retirement without having to pay taxes on their earnings for many years. They can also take money out of the account whenever they want without having to pay taxes or penalties.
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A custodial Roth IRA is a retirement account owned by a minor with earned income but managed by their custodian until they turn 18 or 21, depending on state laws where the minor lives.
The account works the same way as a Roth IRA: after-tax dollars are put into it, investments grow the money tax-free, and when the person retires, the money is taken out tax-free.
Age is not a limit. Even babies, if they have earned income, can have and contribute to a Roth IRA.
Earned income is a requirement. If income is reportable on a W-2 or another income tax form, the individual will be eligible for a Roth IRA.
Annual contribution limits apply. As with any other IRA, the limit for contributing to a custodial Roth IRA is $7,000 or the total of the minors earned income for the year, whichever is less.
Opening a Roth IRA for your child could help jumpstart their preparation for retirement. When it comes to investing, compound interest is a major factor to help grow money, but its heavily dependent on time. Investing early is a huge advantage that is hard to beat.
Thanks for reading! Today I’m going to answer a question I get ALL THE TIME from parents, teens, and even grandparents who are planning for retirement: what age can you get a Roth IRA?
The answer might shock you… there’s actually no minimum age requirement for opening a Roth IRA! Yep, you read that right. Even babies can have Roth IRAs if they meet certain criteria. Let’s dive into everything you need to know about age requirements for Roth IRAs and why starting early is one of the smartest financial moves anyone can make.
The Truth About Age Requirements for Roth IRAs
Here’s the simple truth there is no minimum age requirement to open or contribute to a Roth IRA The IRS doesn’t care if you’re 7 or 70—what matters is that you have earned income during the year you’re making contributions
According to the IRS website, you can make contributions to your Roth IRA even after you reach age 70½, which is different from traditional IRAs that used to have age limits for contributions (though those rules have changed too).
There isn’t a minimum age, so why don’t more kids have Roth IRAs? There is a catch, though.
The Real Requirement: Earned Income
The main requirement to put money into a Roth IRA is not being old, but having a job. This means money from:
- W-2 jobs (like working at a store or restaurant)
- Self-employment gigs (babysitting, lawn mowing, dog walking)
- Any income that’s reportable on a tax form
No earned income = no Roth IRA contributions. It’s that simple!
This type of Roth IRA is for kids under 18 years old. It’s also known as a “Roth IRA for Kids” or “minor’s Roth IRA.” While the child owns these accounts, they are managed by an adult (usually a parent or guardian) until the child turns majority, which in some states is 18 or 21 years old.
How Much Can Kids (or Anyone) Contribute to a Roth IRA?
For 2025, the maximum annual contribution to a Roth IRA is $7,000 for people under 50. But here’s another important rule: you can only contribute the lesser of:
- The maximum annual limit ($7,000 in 2025), OR
- The total amount of earned income for the year
So if your kiddo earned $2,000 mowing lawns and babysitting last summer, their maximum contribution would be $2,000—not the full $7,000.
Why Start a Roth IRA for Your Kids? The Magic of Compound Interest!
Let me tell you a lil’ secret about investing that blew my mind when I first learned about it: time is worth more than money.
Check this out: If your 15-year-old contributed just $7,000 once to a Roth IRA and never added another penny, that single contribution could grow to approximately $139,550 by age 65 (assuming a 6% annual return)!
Compare that to if you started at age 30 with the same $7,000—it would only grow to about $59,000 by age 65. That’s the power of compound interest and starting early!
How to Open a Custodial Roth IRA for a Child
If you’re thinking “this sounds great, but how do I actually do this for my kid?” here’s the process:
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Find a provider that offers custodial Roth IRAs – Not all financial institutions offer these accounts, but several major ones do. According to NerdWallet, Fidelity, Charles Schwab, E*Trade, and Vanguard all offer custodial Roth IRAs.
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Gather documentation – You’ll need Social Security numbers for both you and your child, birthdates, and other personal information.
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Document their earned income – If your child doesn’t get a W-2 (like for babysitting or lawn mowing), keep good records of what they earned. A written log of their earnings is recommended in case the IRS asks questions.
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Set up the account online – Most providers let you complete this process online.
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Choose investments – Once funded, you’ll need to select investments for the account.
Creative Ways to Help Kids Earn Income for Roth IRA Eligibility
If your kid isn’t old enough for a traditional job but you want them to start building retirement savings, here are some legit ways they can earn income:
- Babysitting
- Lawn mowing or yard work
- Dog walking or pet sitting
- Helping with a family business
- Selling crafts or artwork
- Social media content creation
- Computer/tech help for neighbors
Remember: The income must be real and documented. You can’t just “pay” your kid for chores around the house—that doesn’t count as earned income in the eyes of the IRS.
But My Kid Doesn’t Want to Save for Retirement!
I totally get it—convincing a teenager to save for something 50+ years away can be… challenging, to say the least. Most teens would rather spend their hard-earned cash on video games, clothes, or saving up for a car.
Here’s a neat workaround: As long as your child has earned income to qualify for Roth IRA contributions, it doesn’t matter where the actual contribution money comes from. So you could:
- Allow your child to keep their earnings while you make the Roth IRA contribution as a gift
- Match their contributions (like if they put in $500, you add $500)
- Create an arrangement where they contribute a portion and you contribute the rest
This way, your kid learns about saving while still having some spending money. Win-win!
The Flexibility of Roth IRAs for Kids
One of the coolest things about Roth IRAs (for kids or adults) is their flexibility. Unlike many retirement accounts:
- Contributions can be withdrawn at any time, tax-free and penalty-free (but not the earnings)
- After the account has been open for 5 years, up to $10,000 in earnings can be withdrawn tax-free for a first-time home purchase
- Money can be used for qualified education expenses (though taxes may apply to earnings)
This means if your child needs to access some of the money for college or buying their first home, they can do so without major penalties in many cases.
Differences Between Regular Roth IRAs and Custodial Roth IRAs
The main differences are:
- Control of the account – With a custodial Roth IRA, an adult manages the account until the child reaches adulthood (18-21 depending on state laws)
- Account transfer – Once the child reaches the age of majority, the account must be transferred to a regular Roth IRA in their name
- Statements and communications – These go to the custodian, not the minor
Otherwise, all the same rules apply regarding contributions, withdrawals, and tax benefits.
Which Financial Institutions Offer Custodial Roth IRAs?
According to NerdWallet, these major brokerages offer custodial Roth IRAs:
- Fidelity (5.0/5 rating)
- Charles Schwab (4.8/5 rating)
- E*Trade (4.3/5 rating)
- Vanguard (4.4/5 rating)
When choosing a provider, look at factors like:
- Fund fees
- Account minimums (if any)
- Investment options
- Educational resources for young investors
- User-friendly platforms
My Personal Take: Why I Started a Roth IRA for My Niece
I don’t have kids of my own yet, but I did help my sister set up a custodial Roth IRA for my 14-year-old niece who started babysitting last year. She made about $1,200, and we decided to put $600 into her Roth IRA (I matched $300 of her $300 contribution).
At first, she was like “Uncle, that’s SO boring!” But then I showed her a compound interest calculator and how much that $600 could grow over 50 years. Suddenly she was way more interested!
We turned it into a fun learning experience, and she even picked her first investment (a total market index fund). Now she’s actually excited about saving some of her babysitting money. Who woulda thought?!
Bottom Line: There’s No Minimum Age for a Roth IRA
To wrap this up:
- There’s no minimum age requirement for opening a Roth IRA
- The only requirement is having earned income
- For minors, a custodial Roth IRA is required until they reach adulthood
- The maximum contribution is $7,000 (in 2025) or the total earned income, whichever is less
- Starting early gives your child a HUGE advantage thanks to compound growth
So whether your child is 7 or 17, if they’re earning income, consider opening a custodial Roth IRA for them. It might just be the best financial gift you ever give them!
Have you opened a Roth IRA for your kids? Planning to? Drop a comment below—I’d love to hear your experiences and answer any questions!
Until next time,
Your friendly neighborhood finance blogger
Remember: I’m not a financial advisor, just a finance enthusiast. Always consult with a qualified financial professional before making investment decisions for yourself or your children.
Contributions can be withdrawn at any time
Retirement accounts are known sticklers about distributions — many charge a 10% penalty on money taken out before age 59 ½. That’s tough on kids, who have years to go before reaching retirement age.
But a Roth IRA is different. You can take out the money from the account whenever you want and use it for anything from a toy car to your first real car.
That flexibility is balanced by stricter rules for the Roth IRA account’s earnings, or the return on contributions that are invested. Distributions of investment earnings may be taxed as income, penalized with a 10% early distribution tax or both.
The Roth IRA is a good choice for kids who want easy access to their money and parents who want to make sure some of that money is saved for the future.
» Get the full details on Roth IRA early withdrawals
What is a custodial Roth IRA?
A custodial Roth IRA is a Roth individual retirement account that is owned by a minor but controlled by an adult until the minor reaches legal adulthood. The rules of a custodial Roth IRA follow the same parameters and IRS guidelines as a typical Roth IRA.
At What Age does a Roth IRA not Make Sense?
FAQ
Can I open a Roth IRA for my 2 year old?
A responsible adult, usually a parent, sets up a custodial Roth IRA for a minor. When the minor turns 18, they become the only owner of the account (May 14, 2025)
Can my 16 year old start a Roth IRA?
Yes, a 16-year-old can open a Roth IRA, but it must be a custodial Roth IRA with an adult acting as custodian, and the 16-year-old must have earned income to make contributions. The earned income must be at least as much as the total contribution amount for the year.
Who cannot open a Roth IRA?
You generally cannot contribute to a Roth IRA if you have no earned income or if your modified adjusted gross income (MAGI) is above the IRS-set income limits for that year.
Is a Roth IRA better than a 401k?
There is no one “better” account; both a Roth IRA and a 401(k) have their pros and cons. The best choice for you depends on things like your current and expected future tax rate, your income level, your savings goals, and your access to an employer match. You can also contribute to both a 401(k) and a Roth IRA, or a Roth 401(k) and a Roth IRA, to get the best of both options.
What is the age limit for a Roth IRA?
There is no age limit for a Roth IRA. Anyone who is over the age of majority in their jurisdiction can open an account on their behalf. Anyone younger than this can have a custodial account opened for them, so long as the contributions don’t exceed that year’s earned income.
Can a minor open a Roth IRA?
A child’s eligibility for a Roth IRA isn’t based on age. Discover what makes a minor eligible and how an adult can establish an account on their behalf. It doesn’t matter what age you are to open a Roth IRA because the IRS doesn’t set a minimum age for contributions. The determining factor is not age but the presence of earned income.
Can a 70 year old contribute to a Roth IRA?
Individuals over 70 can still contribute to a Roth IRA as there is no age limit, provided they have earned income. Does the age requirement for a Roth IRA change if I have a high income? No, the age requirement for Roth IRA contributions remains the same regardless of income. However, income levels can affect the contribution limits.
Can a 18 year old open a Roth IRA?
Yes. Anyone over the age of majority can open their own investment portfolio, including a Roth IRA. In most states that’s 18 years old although a handful of jurisdictions set the age of majority higher, typically 19 or 21. The rule of thumb is that you must be legally old enough to enter a contract under your own authority.
Can I contribute to a Roth IRA if I’m older?
The primary requirement for contributing to a Roth IRA is having earned income. This shift in focus from age to income means that as long as an individual has income from employment or self-employment, they can contribute to a Roth IRA, regardless of their age. The removal of the age limit is particularly beneficial for older savers.
Can a 5 year old open a Roth IRA?
So are their withdrawals of earnings if the account is at least five years old. 5 6 Anyone, at any age, can open and contribute to a Roth IRA as long as their modified adjusted gross income (MAGI) meets certain income eligibility limits.