Why Your Child Should Have a Roth IRA: Roth IRA for Kids Explained by a Certified Financial Planner

by | Sep 10, 2022 | Vanguard IRA | 9 comments

Why Your Child Should Have a Roth IRA: Roth IRA for Kids Explained by a Certified Financial Planner




Supercharge your kid’s retirement with tax-free growth AND withdrawals in a Roth IRA.

In this week’s edition of Transformation Tuesday, Colin Exelby shows how a child as young as seven years old can have their very own Roth IRA and start the clock to build tax-free wealth… The ins and outs of withdrawing money early from a Roth IRA…and how much tax-free money you could have if you started investing in a Roth at age 10.

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This is general tax information and hasn’t considered your personal tax situation. It is based upon current tax information available in April 2021. This information should not be relied upon as tax advice. Please consult your tax professional. This information is for educational purposes only. The solutions discussed may not be suitable for your personal situation, even if it is similar to the hypothetical example presented. Investors need to make their own decisions based on their specific investment objectives, financial circumstances, and tolerance for risk.

I am a Certified Financial Planner Professional™ or CFP®. See the Forest Through the Trees is a personal finance, health, and wellness blog and YouTube Channel that aims to help you see the bigger picture. My goal is to help you think outside the box about your life, your money and your health to be the best you can possibly be.

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See also  Traditional IRA vs ROTH IRA (Series 7 and SIE Exam)

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9 Comments

  1. ains

    I opened 2 up for my daughters and pay 100 dollars a month each I was never asked for child’s income is the account gonna be ok ?

  2. Jimmy Lopes

    I have a photography business where I get royalties from stock images… this includes pictures of people, place and things. Can I pay my 1 year old $400 a modeling fee and put that in a ROTH IRA for them? I know child models can get upwards of $250 an hour so $400 is realistic if its over many sessions. Also the $400 is so there is no self employment tax they would need to pay. Thanks

  3. Gary DeMille

    Great informational video! My 15-year old grandson had a summer job at a car dealership and will again when he has a school break this fall. I hope to fund a Roth account for him as I also opened and funded Roth accounts for my 2 daughters in 2020. Question: if the Roth accounts ever drop below what ever was contributed due to market down turns, would this impact how much they would have access to? My daughters' accounts were given $12k total for 2020 and 2021, but I saw their accounts this year were less than the $12k. I trust my girls and grandson would not tap into their Roth accounts prior to retirement, but emergencies do occur. Thank you!

  4. Ann Hughes

    can you use child tax credit to fund the roth IRA for your child?

  5. U. Schultz

    Is it only up to $10,000 that can be withdrawn? Let’s say my child has $50,000 in their Roth IRA… they want to use it to pay for college and books. Can they take the entire $50k? If they withdraw before 59 1/2… does the money have to be replaced?

  6. Jean Pierce

    Looooove This video

  7. Maddie Kennedy

    Thank you baby ➕positive people like you is what I need in my life . Ily a lot

  8. See the Forest Through the Trees

    Wondering what the impact of a Roth IRA is on a student's eligibility for financial aid? Generally, retirement accounts do not count as assets of the student on a FAFSA filing so the Roth IRA will not impact it…until a withdrawal is made. Once a withdrawal is made, it can impact financial aid in the year AFTER the withdrawal. Ideally, make any Roth IRA withdrawals for college, after applying for student aid.

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