savings

Setting Up a Roth IRA for a Teenager

Children can open an account if they have earned income.

My 16-year-old son is working as a camp counselor this summer. Can he open a Roth IRA? --A.L., Villanova, Pa.

Yes. Children of any age can contribute to a Roth IRA as long as they earn income from a job. Your son can contribute the amount he earns for the year, up to $5,500 for 2013.

Although some brokerage firms and mutual fund companies don’t let minors open IRAs, several firms with low fees and investment minimums, including TD Ameritrade, make it easy to open a custodial IRA for a minor. Your son can invest in stocks, funds and anything else available to brokerage customers. The IRA must be in his and the custodian’s name, and it must use his tax identification number. Charles Schwab allows a minor to open a custodial IRA with $100; it charges no annual or maintenance fees.

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