A Roth IRA provides generous tax breaks for retirement savings — especially if you invest in it early.
Just How Young Can You Start a Roth IRA? | Personal-finance
See, while a traditional 401(k) and IRA allow you to make pre-tax contributions, a Roth takes after-tax contributions but allows you to make tax-free withdrawals. If you invest in the account early, your money can grow for a very long time and you can take out all of your gains without owing taxes on them (as long as you follow a few basic rules).
The big question, however, is just how early can you invest in a Roth IRA? And the answer may surprise you. It’s an answer that parents should know about, because they may be able to put their children on the path to riches with very little effort.
Starting a Roth IRA early can really pay off
To start a Roth IRA for yourself, you need to be 18 years old. But that doesn’t mean a Roth IRA can’t be opened for someone younger. Parents can open a Roth IRA on behalf of their children, acting as a custodian of the account until their kids reach adulthood and assume control. And there’s no minimum age to open an account when you take this approach — as long as their children qualify.
Unfortunately, that generally doesn’t mean you can start putting money into a Roth IRA for your newborn. That’s because you can invest in one only if your child has earned income (income from a job). Parents can’t give their children money to put into a Roth because the income wouldn’t be earned. The good news, though, is that as soon as your child starts earning any money, they can begin contributing.