Setting up a Roth IRA for children, whether to give them a head start on their retirement savings or as a temporary vehicle for funds earmarked for their education, is a pretty slick move employed by savvy parents.
In this video, I go over why you would set up a Roth IRA for your children (also known as a custodial Roth IRA), the rules for setting up a Roth IRA for children, and how exactly you can set up a Roth IRA for your kids at Fidelity…step-by-step!
► My Personal Finance Course (Use Coupon Code YOUTUBE for 50% Off!):
Table of Contents:
0:00 Roth IRAs for Kids
1:29 Basic IRA Rules
3:01 Why the Roth IRA Is Superior to a Traditional IRA for Children
4:16 How a Roth IRA Can Make Your Child a Millionaire
7:09 Here’s the Catch (Earned Income)
8:05 How We Generate Earned Income for Our Young Children
9:12 FICA Tax Exemption When You Employ Your Own Child
10:38 How S Corporation Owners Can Get the Exemption
13:33 Start a Business and Pay Your Kid!
14:16 What If Your Kid Makes Money Outside of Your Own Business?
15:04 Where to Open a Roth IRA for Your Kids
15:50 How to Open a Custodial Roth IRA for Kids in Fidelity Step-by-Step
#rothira #rothiras #generationalwealth…(read more)
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I just watched this video and am wondering how the earned income is verified? For example if my son gets money from mowing the grass for someone etc…
Thanks for advice while I’m young
Thank you Logan! Are YOU yourself able to choose what ETF, stocks…invest into
with those Fidelity IRA’s? or does Fedelity invest for you?
I love what I've heard thus far. It sounds like you are doing what I have started for my kids and grandkids. #powerup
I've subscribed and I will definitely be back and I'll be recommending your channel to my viewers. Thank you, you gave me the boost I needed. #powerup
I'm determined to push out another video before I go back to work on Tuesday.
My daughter works and has a Roth IRA. My question is, if she makes let’s say 10k a year but only wants to invest 5k. Could I contribute the difference? Hope that makes sense. Also does this effect their college funding like FAFSA? Also when do teens pay taxes (what income bracket)? Are target fat index funds good for teens?
So many questions lol
Watched this video and got pumped up! But now I am a bit confused by the example of a $900 contribution when the child is age 9, $1000 at age 10, $1100 at age 11, … continuing the $100 annual increases until a final $1800 contribution at age 18, totalling $13,500, at which point contributions are permanently halted. At 8% annual ROR, doesn't the child reach a $1M balance around age 70, not 60? If my math is bad, please advise. It wouldn't be the first time. 🙂
Another question. The step by step is helpful but I am on fidelity website now and when I get to the part to link an account should I link the business account? With this option I have to print out a form, go to the bank and get medallion signature guarantee. Is this what you did? Seems easier to use a checking account.
I’m a bit confused why you say the kid can spend the money and parent still invests it so long as it doesn’t exceed the income amount? Just thinking as a worker here but the retirement payments always came out of my account and the employee invested it for me. I couldn’t spend it twice ? Please explain and thanks for the video.
Can I also add this money to their 529 plan?
I was wondering what Stocks/ETFs/Index funds you are purchasing for your kids Roth.
Once the child turns age of majority – will they have to report this account to FASFA when applying for financial aid for post secondary education?
good information, not hard to set up as initially thought
Love this video but I have to say I’ve played with a few investment calculators and have no idea how 13500 investment with about 40 years @ 8% yield/ 1 million? I get about 350-375k…explanation???
When I made the account for my kids Roth ira it didn’t show me a custodial Roth? So do I need to make another account for the custodial ? Helppp
Hi there, I enjoyed your video. Can you as the employer match contributions to further lower your tax liability? Or must the employee solely fund?
I setup a custodial Roth IRA for my 4 month old son a few days ago through fidelity. I initiated weekly transfers from MY checking account of $30 per week. Is this ok to do since the money is coming from me and he didn’t earn it? This amount won’t exceed the $6,000 per year.
Great information!
I have question. My daughter is 11. She helps two families within our neighborhood with dog walking, cleaning, and watching their kids. She earns anywhere between $10-$30 a month by doing so.
Is this considered earned income? If so, how can I prove that so we can open her a Custodial Roth IRA?
Can i open ira roth for my 3 years old? Obviously he doesn’t work so i can contribute right? You kept saying their earned income which confused me. Can parents not contribute? Do kids have to work?
Hi! So if my 6 & 10 year old make $25/month (300 a year) helping with neighbors dogs and I invest that into a Roth IRA is that sufficient for income? Since it’s so little annually, would they also not have to pay taxes?
If my daughter, 15, makes appr. $3000 a year by doing yard work, snow removal, walking dogs, other similar work and receives only cash payments, what kind of proof do I need to provide when opening an account to prove that this is what she earned?
Instead of all the complications of a S-Corp or setting up a business… technically a child can work as self-employed under $400 and contribute to Roth as earned income. My kiddos made about $200 ish net doing yard work and odd jobs and very age appropriate for 4 year olds. There’s no filing requirements unless they earn more.
how is it exactly you prove or do you have to prove the child made X amount of dollars, lets say 6,000 for the year babysitting or Modeling for you? I'm assuming the child (even newborn baby) must file a tax return?
Logan this is fantastic. I have a 2 week and 2 year old and I’m trying to figure out how much earned income I can give them for different modeling type activities. It’s obviously really gray but what can I pay them that isn’t going to upset the IRS? Obviously I can’t take a few pictures and say it was a $5k session. I called fidelity but not a lot of people have a lot of answers or experience in this. Any additional insight you can add on rates for modeling/YouTube type initiatives?
Thank you
I’ve been looking to open a Roth IRA recently I’m currently 16 and I’ve been making some money from reselling on eBay and other apps but I do all of that using my moms name would she have to put me down as an employee for the earned income or how would that work
Thank you
Hey Logan, Would you be able to create and sell an NFT/picture of your kid and buy it from them for earned income? This would create a ledger of purchase and may be sketchy at worst but probably perfectly legitimate right?
Logan your the only u tuber with logic & reason the other phony u tubers are now using child tax credits as click bait to make it sound like we are getting stimulus checks tomorrow when they know damn well it will never happen
I'm just wondering if you have heard anything about a forth stimulus check supposedly in October? Thanks!
Very nice picture, your kid is just like you. God bless you guys!
Hey Logan great video.
I wanted ask you if you have consider a sudo savings bank account with stable coins ? What I'm taking about is Gemini Dollar giving 8.05% APY. This a stable coin that gives you a great return on a year. Would you consider learning a bit about it and maybe making a video ?
If you see that Crypto is not your cup of tea I understand that and respect it.
Have a great day.
So my 4 year old needs to be working for me to open a Roth IRA for kids?? I work a normal office job, my husband works, we don't have a Youtube channel or sell Avon so we are not "self employed". It's reasonable to say he babysits or mows lawns?
How can you claim your child as an employee when they are a baby?!
Rudy Giuliani is welcome back in New York as mayor 2022. Mr Satan first REEEEEEE
How do I set up for my nieces and nephews?
The SYSTEM has you brother
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