Helping Young Workers Open a Roth IRA

By KIMBERLY LANKFORD | Kiplinger

 

Q: My 16-year-old son earned some money helping out at a summer camp last year. Is he eligible to contribute to a Roth IRA, and is it too late to make a 2017 contribution? What are some IRA administrators that let kids open a Roth with just a little money?

 

There’s no minimum age to be eligible to make Roth IRA contributions; you just need to have earned income from a job. Your son can contribute up to the amount of money he earned from his job for the year, but no more than the $5,500 maximum for 2018. You can even give him the money to contribute. He has until April 17, 2018—the tax deadline—to make a contribution for 2017.

Contributing to a Roth IRA can be one of the smartest financial moves for teenagers starting to work. Even contributing a small amount at first can make a huge difference over the long run. Here’s the math: Say your son invests $1,000 each year to a Roth IRA from ages 16 to 21. From ages 22 to 49, he contributes $5,500 a year—the current maximum.

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