Turns out, you don’t need to wait until you have grey hairs to think about retirement. Brokerages are now offering Roth IRAs tailored for those under 18. That’s right – the youth!
Here’s the catch: for a kid to get in on this, they need to have earned some cash themselves. Think lawn mowing, babysitting, or even that ambitious lemonade stand. And once they have that “earned income”, either they or someone on their behalf can pitch it into the IRA.
Why is this amazing? Well, starting young on these IRAs gives them a powerful boost – the magic of compound growth. Imagine their small savings snowballing over the years. Financial pros swear by this, with some even calling compounding “one of the most powerful forces in the universe.”
But, managing this requires a touch of paperwork – especially if we want to keep the IRS happy. Parents, keep track of your kiddo’s earnings, and remember the cap on annual contributions.Â
Want to get deeper into the how’s and why’s of Roth IRAs for the young ones? Hop into the full article here.
