Retirement Watch Lighthouse Logo
Retirement Watch Lighthouse Logo

Roth IRAs for Your Children and Grandchildren

Last update on: Mar 15 2020

I’ve long recommended that people consider contributing to Roth IRAs for their children and grandchildren to the extent that the youngsters have earned income. It’s a great way to give and establish a foundation for them, and also to help them learn about money management. Here’s an article that explains the strategy in detail.

Here’s why this works. Once a child has earned income, they’re eligible to open an Individual Retirement Account. A Roth IRA is usually the better choice for young savers because they’ll get decades of tax-free growth, and in a pinch, they can take out the contributions before retirement with no tax or penalty-hit. Note that IRAs for those under 18 or 21 (it varies by state) must be opened by an adult as a custodial account. So, you sign on and act as custodian, and then, when they’re of legal age, they’ll have full access to the money.

 

bob-carlson-signature

Retirement-Watch-Sitewide-Promo
pixel

Log In

Forgot Password

Search