IRAs

Can My Teen Contribute to a Roth IRA?

Why it's never too early to start saving for retirement.

My 16-year-old son is earning money by mowing lawns. Can he contribute to a Roth IRA? A.C., Knoxville, Tenn.

You can contribute to a Roth IRA at any age if you earn money from working. Your son can contribute up to the amount he earns, but no more than $5,500 for 2018. You can even give him the money to contribute.

A Roth IRA can be a smart financial move. Say your son invests $1,000 a year from age 16 to 21, then $5,500 a year from age 22 to 49, and $6,500 from age 50 to 65. If his investments earn 7% per year, he'll have $1.74 million in his Roth IRA by age 65, says Anthony LaBrake, a certified financial planner in Boca Raton, Fla. He can withdraw his contributions without penalty or taxes at any time, and he can take earnings tax-free after age 59.

Fidelity and TD Ameritrade offer Roths for minors with no minimum investment. Vanguard lets minors open a mutual fund IRA with $1,000 or a brokerage IRA with no minimum. Schwab has a $100 minimum.

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