You can open a Roth IRA at any age, but you must have earned income to fund it

There is no minimum age to open a Roth IRA. A child, teenager, or young adult can open one as long as they have money they earned themselves—from a job, self-employment, or modeling work. The account belongs to them, but a parent or guardian must co-sign the paperwork and manage the account until the child turns 18 (or 21 in some states).

The real limit is not age but income. You cannot put money into a Roth IRA unless you earned it. If your child has no job, they cannot fund a Roth IRA, even if you give them the money. If they do have earned income—even $500 from a summer job—they can open a Roth and contribute up to that amount (or the annual limit, whichever is smaller).

The younger someone starts, the more time their money has to grow tax-free. A 16-year-old who contributes $2,000 to a Roth and never touches it could have tens of thousands of dollars by retirement, simply because of compound growth over 50 years.

Key Takeaways

  • A minor can open a Roth IRA if they have earned income from a job or self-employment, with a parent or guardian as custodian.
  • The contribution limit is the smaller of the annual IRS limit or the total amount the child earned that year.
  • Money in a Roth IRA grows tax-free and can be withdrawn tax-free in retirement, making early accounts extremely powerful over decades.
  • A parent cannot fund a child's Roth with their own money, but they can give the child a job and pay them from a family business or household account.

How a custodial Roth IRA works for minors

When a child opens a Roth IRA, it is called a custodial Roth IRA. The parent or guardian is the custodian—they sign documents, manage the account, and make investment decisions until the child reaches the age of majority (usually 18, sometimes 21 depending on the state and the financial institution).

The child's name and Social Security number go on the account. The money is legally theirs, not the parent's. When the child turns 18 or 21, the account automatically converts to a regular Roth IRA in their name alone, and they take full control.

Most major brokerages offer custodial Roths—Fidelity, Vanguard, Charles Schwab, and others all have them. You will need to provide the child's Social Security number, proof of earned income (a W-2, 1099, or pay stub), and identification for the parent or guardian.

What counts as earned income for a Roth contribution

Earned income means money the child actually worked for. W-2 wages from a job count. Self-employment income counts—if a teenager mows lawns, babysits, or sells items online, that money counts. Modeling income, acting income, and athletic scholarships that are paid as wages count.

Money that does not count: allowance, gifts from relatives, investment returns, interest from a savings account, or money from a trust. If a parent wants to fund a child's Roth, the legal way is to hire the child to do real work—filing, data entry, social media management for a family business—and pay them from a business account or household account. The work must be genuine and the pay reasonable for the task.

The IRS does not police this heavily for small amounts, but the principle is clear: the child must have earned the money themselves. A pay stub or invoice showing the work and payment protects both you and the child if there is ever a question.

Annual contribution limits for young savers

For 2024, the annual Roth IRA contribution limit is $7,000 for anyone under 50. However, you cannot contribute more than the child earned that year. If a 14-year-old earned $2,500 from a summer job, the maximum they can contribute to a Roth is $2,500, not $7,000.

The limit resets each January 1. If a child earns $3,000 in 2024, they can contribute up to $3,000 to their 2024 Roth. If they earn $4,000 in 2025, they can contribute up to $4,000 to their 2025 Roth. The limits are set by the IRS and change slightly most years, so check the current year's limit before you contribute.

You can contribute to a Roth for a child until the tax filing deadline the following year—usually April 15. So earnings from 2024 can be contributed to a 2024 Roth IRA until April 15, 2025.

Why starting young matters more than the amount

A 16-year-old who contributes $2,000 to a Roth and never adds another dollar could have $200,000 or more by age 65, depending on investment returns. A 35-year-old who contributes $7,000 per year for 30 years will have less total growth, even though they contributed far more money, because they had less time for compound growth to work.

This is why a Roth opened in childhood is one of the most powerful wealth-building tools available. The money grows tax-free forever. Withdrawals in retirement are tax-free. There are no required withdrawals at any age. The account can sit untouched for decades and still be there when the person retires.

Even small contributions matter. A 13-year-old who contributes $500 from a part-time job has started the clock. The earlier the account opens, the more time it has to compound.

How to open a custodial Roth IRA

Choose a brokerage that offers custodial Roths. Fidelity, Vanguard, Charles Schwab, E*TRADE, and Merrill Edge all offer them. Visit their website and look for "custodial IRA" or "minor IRA" in the account types.

You will need: the child's full name and Social Security number, proof of the child's earned income (a recent pay stub, W-2, or 1099), and identification for the parent or guardian (usually a driver's license). Some brokerages let you open the account online; others require a phone call or in-person visit.

Once the account is open, you can fund it by transferring money from a bank account or writing a check. The money can be invested in stocks, bonds, mutual funds, or index funds—whatever the brokerage offers. Many parents choose low-cost index funds for young accounts because the long time horizon allows them to ride out market swings.

What happens when the child turns 18 or 21

The custodial account automatically converts to a regular Roth IRA in the child's name. The parent's role ends. The young adult can now make their own investment decisions, add more money if they have earned income, and manage the account independently.

The money stays in the Roth. No taxes are owed on the conversion. The account history and growth carry forward. If the account has been open for five years or more by the time the person reaches 59½, they can withdraw earnings tax-free. If it has been open for less than five years, they can still withdraw their contributions tax-free at any time, but earnings would be taxed if withdrawn before 59½.

Many young adults do not realize they now own and control this account. A parent should explain what it is, how it works, and why it matters to leave it alone until retirement.

Frequently Asked Questions

Can I put my own money into my child's Roth IRA?

Not directly. You can only contribute money the child earned themselves. However, you can hire your child to do real work—cleaning, yard work, office tasks—and pay them from a family business or household account. Once they have earned income, they can contribute it to their Roth.

What if my child earns money but does not want to contribute it all to the Roth?

They do not have to. If a child earns $5,000 but only wants to contribute $2,000 to the Roth, they can do that. The contribution limit is a maximum, not a requirement. They can spend or save the rest however they want.

Can a child withdraw money from their Roth IRA before retirement?

Yes, but with limits. They can withdraw their own contributions at any time, tax-free. Earnings can only be withdrawn tax-free if the account has been open for five years and they are 59½ or older. Withdrawing earnings early usually triggers taxes and a 10% penalty.

Do I have to report the custodial Roth on my taxes?

No. The Roth is in the child's name and Social Security number, so it does not appear on your tax return. The child may need to file their own return if their earned income exceeds the filing threshold, but a Roth contribution does not create a tax liability.

What if my child does not have a Social Security number yet?

They will need one to open a Roth IRA. You can apply for a Social Security number at your local Social Security office or online at ssa.gov. The process usually takes a few weeks.