5 Rules for Opening a Roth IRA for Your Kid
If you want to give your child a jump start on investing, establishing a Roth IRA for them is a great place to start. You can teach them the value of saving and investing, plus they'll get the benefits of extra time for their money to compound. Opening a Roth IRA for kids under 18 is allowed, but there are certain rules you have to follow. Here are five things to know before you start helping your kid save for their retirement.
Anyone who funds an individual retirement account (IRA) needs to have earned income, including children. Earned income means they have to make money by working. If they have trust income, that doesn't count, for example. If your kid makes money from doing jobs like babysitting or lawn-mowing, that income could count. But be aware that they could have to pay the 15.3% self-employment tax.
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Source Fool.com
