Would you start a Roth IRA for your kid?

Has anyone here opened a Roth IRA for their kids? If so, did you get them to invest in it on your own? In general, do you think it’s a good idea?

I got this letter recently from a grandparent who wants to encourage her 17-year-old grandson to start investing part of his after-school paycheck in a Roth IRA. He’s already saving half his paycheck in a bank account. (I wish I’d been that responsible at 17!) https://www.thepennyhoarder.com/investing/roth-ira-for-grandson/

Basically, a minor can invest in a Roth IRA as long as they have an adult to serve as the custodian and if they have earned income. (Technically, it doesn’t matter who funds the account. For example, if the minor had $4,000 of income for the year, they or their parent could contribute up to $4,000.)

I’d certainly urge anyone to start investing early to get as much compounding time as possible. But to get the full benefits of a Roth IRA, he’d need to keep his hands off that money for more than four decades. That’s a lot to ask of a teenager!

I think in this case, it makes sense to start small since the ultimate goal is to let the money grow until retirement age. Maybe he could put 10% of his paycheck in the Roth IRA, save 40% and then spend the other half. He can use the savings for short- and medium-term goals.

Contributing 10% of a 17-year-old’s paycheck might not make a big difference in his future nest egg. But starting a good financial habit early could have a big impact. Most people could afford to retire comfortably if they could turn back the clock and invest 10-15% of each paycheck from the time they started working.

What does everyone think? Do you/would you encourage your kids and grandkids to start a Roth IRA when they’re teenagers?


I have not encouraged my kids to invest. They do have to save for and purchase their car if they want to drive, so that’s the focus for now. (15 and 18)
But its a good reminder for me to encourage them to utilize a 401K at work if its available.


It’s a big ask to have a teenager essentially start saving for retirement. But the real benefit, like @dear.penny mentioned, is getting a young person to learn some sound financial habits that will set them up for success later in life. So if that’s adding a little money each month to a Roth IRA or some other sort of long-term savings account, I think it’s great!


Definitely something I will try and encourage my son to do when he gets older and can start earning income. At just over a year old, he has a bit to go before he will start working any type of job


I was thinking of doing it. I think it is better when they have a full time job. I am thinking my 18 year old should get a credit card to start establishing credit.

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