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Roth for kids - need info
Old 01-21-2013, 01:47 PM   #1
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Roth for kids - need info

OK, my oldest turned 15 a few months ago and is already talking about learning to drive... my vote is that he will need to get a job to pay for his gas etc.... it will probably not happen until he is 16... but, I like to plan ahead...


My thinking is that whatever he earns I will make him save 50% and put it in a ROTH... I will match that amount, so in effect all his income net of taxes will be invested...

Is there a problem with this? I can not find any age requirement for opening a ROTH. I have looked in general and at Vanguard and do not see any age limit.

Any thoughts or suggestions
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Old 01-21-2013, 01:50 PM   #2
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Gosh... give VG a call tomorrow on their toll free number. Then you will know for sure.
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Old 01-21-2013, 01:55 PM   #3
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Gosh... give VG a call tomorrow on their toll free number. Then you will know for sure.

Thanks, thought of that... just wanted to see if anybody knew now and if there were other thoughts on the subject...
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Old 01-21-2013, 02:18 PM   #4
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Didn't click on any of the links, but a quick 'net search showed....
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File Type: png Teen Roth.PNG (50.6 KB, 3 views)
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Old 01-21-2013, 02:20 PM   #5
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There isn't an age limit...it's based on generating earned income.
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Old 01-21-2013, 02:21 PM   #6
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Didn't click on any of the links, but a quick 'net search showed....
Thanks... I was using kids etc. and not getting what I wanted... looks like I need to use 'teen'...
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Old 01-21-2013, 04:20 PM   #7
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I did this for my childern when they were teens (15 years ago). Fidelity declined (not of legal age to enter a contract they said). It took some shopping (much harder then), but I found a small MF shop that would do it. Since then they were acquired by MegaMFund house. Interested to know if you were successful and where. Thanks!
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Old 01-21-2013, 04:22 PM   #8
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I did this for my childern when they were teens (15 years ago). Fidelity declined (not of legal age to enter a contract they said). It took some shopping (much harder then), but I found a small MF shop that would do it. Since then they were acquired by MegaMFund house. Interested to know if you were successful and where. Thanks!
I did this with my kids (started 6 or 7 years ago) and used both USAA and Vanguard--no problems at all opening Roths for them.
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Old 01-21-2013, 06:25 PM   #9
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If you had an infant, lets say it was a baby model for a photographer, could it contribute to a Roth?
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Old 01-21-2013, 06:25 PM   #10
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If you had an infant, lets say it was a baby model for a photographer, could it contribute to a Roth?
yes
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Old 01-21-2013, 06:29 PM   #11
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I did something similar for mine, but also when they were a couple of years older, and wish I had started earlier. ROTH is such a good vehicle for tax free accumulation. The age shouldn't be an issue if he has a valid W-2, but it doesn't hurt to call ahead.

This could be more of a challenge

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My thinking is that whatever he earns I will make him save 50% and put it in a ROTH... I will match that amount, so in effect all his income net of taxes will be invested...
Good luck with that.
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Old 01-21-2013, 06:53 PM   #12
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A problem is that many places won't let a minor have a Roth account.
My daughter started one, but I believe she was already 18 when she opened it.

Also, if one earns $1,000, then one can contribute $1,000 even if FICA, medicare taxes are taken out.
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Old 01-21-2013, 08:01 PM   #13
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I think giving him an incentive by matching his contribution is a good idea. However, you can't MAKE anyone contribute a certain % of THEIR money. You could say "i'll buy you a used car to drive back and forth to work but you have to put half of all earnings into a ROTH until you go to college".
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Old 01-22-2013, 10:22 AM   #14
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I think giving him an incentive by matching his contribution is a good idea. However, you can't MAKE anyone contribute a certain % of THEIR money. You could say "i'll buy you a used car to drive back and forth to work but you have to put half of all earnings into a ROTH until you go to college".
Since he is a minor child, I can 'make' him. I have legal control of all his money. Once he becomes an adult, you are correct...

As MichaelB pointed out, the 50% amount might be the harder part, but with DW...


I think this will not be an issue for at least another year or so... both DW and DS do not think he should have to work at all... right now I will agree, but when he starts driving.... it will be different....
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Old 01-22-2013, 05:29 PM   #15
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It has to be earned income that goes in a ROTH.
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Old 01-22-2013, 11:29 PM   #16
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This is a great idea. If your kids just "set it and forget it" and don't get tempted to raid their money, this money can grow seriously over time. By age 60, a 5500 contribution that has had 45 years to grow will be worth 30 k in real purchasing power with a 4% real rate of return.
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