"Roth IRAs are great investment vehicles for kids. There's no age restriction to setting one up; the only restriction is income. ... Basically, the child needs to have some sort of income," said Jordan Wexler, CEO of EarlyBird, an app focused on helping children invest, noting that activities like babysitting or mowing lawns for neighbors would be great ways for kids to get started.
Investing early in a Roth IRA is key since there's a limit on how much you can contribute per year: The 2020-2021 cap is $6,000. And as your earning power grows over the course of your career, you could hit Roth IRA income limitations: A single person filing taxes must have a modified adjusted gross income of less than $139,000 in 2020 and $140,000 in 2021 to contribute to a Roth IRA.
One thing that complicates setting up a custodial Roth IRA is that kids need to be able to show a paper trail of where they're making money, and the income will need to be declared on a"There really is no minimum age that a child can actually file a tax return," said Lauren Silbert, vice president and general manager of The Balance, a personal finance website, and a personal finance expert, explaining that as long as you're making more than about $1,100 in a year, you can file...
"The foundation of a healthy financial future is understanding investing, and Roth IRAs offer a really great entry point to understanding making money and spending and budgeting, and introducing the idea of compound interest and being able to put money away," Wexler said.
One of the fun aspects about Custodial Roth IRA's is that they open a great door for conversations around entrepreneurship and how to get started on making money at a young age!
If nbc cared about human rights they would BoycottBeijingOlympics