Can a Kid Have a Roth IRA? Custodial Roth IRAs Explained for Parents

There is no minimum age to contribute to an IRA. The requirement that stops most children is different: you can only contribute up to the amount of the person's taxable compensation for the year, per IRS Publication 590-A. A child with genuine earned income, from babysitting, lawn mowing, or a part-time job, can contribute to a Roth IRA, and a parent opens it as a custodial account.

How does a custodial Roth IRA work?

An adult (usually a parent) opens and manages the account for the minor. Contributions are after-tax, the money grows tax-free, and qualified withdrawals in retirement are tax-free. The 2026 IRA contribution limit is $7,500, but a child's contribution is capped by what they actually earned that year, whichever is less. When the child reaches the age of majority in their state, the account becomes theirs.

Why do families bother?

Time. Decades of compounding on even a few thousand dollars of teenage earnings can grow into a meaningful retirement foundation, and Roth growth is never taxed if the rules are followed. Contributions (not earnings) can also be withdrawn at any time without penalty, which adds flexibility.

What counts as earned income?

Wages, salaries, tips and self-employment income. Allowance, gifts and investment income do not count. The income must be real pay for real work; if the child works in a family business, the pay must be reasonable for actual work performed, and normal tax rules apply.

Frequently asked questions

Can I just match my kid's earnings with my own money? The contribution is limited to the child's compensation. Families sometimes gift the child cash equal to their earnings while the child's paycheck goes into the IRA, but the IRA contribution itself still cannot exceed what the child earned.

Does a child's Roth IRA affect college financial aid? Retirement accounts are generally not counted as assets on the FAFSA, though withdrawals can count as income. Rules change, so check current federal student aid guidance when the time comes.

Sources and further reading: IRS, Publication 590-A, Contributions to IRAs (https://www.irs.gov/publications/p590a); IRS, "Retirement Topics: IRA Contribution Limits" (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits).