Roth IRA for small children?

[richinspirits]

Setting up a Roth IRA for kids. What must be considered? Are there any providers that handle this better than others that you can recommend? Do you need to contribute regularly, or are sporadic contributions ok?

I understand that it has to be money that they earned, e.g. not gifts. I would never force my children to work, but there is a lot of work in our city being extras in filming movies/shows and they have shown an interest (which I would foster, post-pandemic), and also have few expenses at this point (are years away from driving/college). If they earned money at such a young age and it could grow for 6 decades plus...it's a very intriguing concept!

[Like2Plan]

Sporadic contributions are fine. I have not tried to set up a custodial Roth IRA (DS was so close to 18 when he decide to open it that he was advised to just wait until 18 to open it), but I would look at Fidelity if I were going to do it these days. Fidelity has many local offices and I have found that pretty handy especially for notary services. Also, Fidelity has zero index funds--there is no minimum to invest and zero expense ratios on the index funds. That is particularly handy if you want to invest in the total stock market and you don't have a lot of money to invest.

https://www.fidelity.com/mutual-funds/investing-ideas/index-funds?imm_pid=700000001009773&immid=100820&imm_eid=ep35415530201&gclid=CjwKCAiAsOmABhAwEiwAEBR0ZkLytABdbVzKoN6L8-QmdK9tcWPMRNP0ThzaYcGou7hfeb-Xjy18nxoC9ncQAvD_BwE&gclsrc=aw.ds

[disneysteve]

As long as they have earned income, you can definitely open a custodial Roth for them. I did that with my daughter when she was a teen and had babysitting income. It's easy now that there are commission-free ETFs and mutual funds available through multiple companies.

[moneybags]

Setting up a Roth IRA for kids. What must be considered? Are there any providers that handle this better than others that you can recommend? Do you need to contribute regularly, or are sporadic contributions ok?

I understand that it has to be money that they earned, e.g. not gifts. I would never force my children to work, but there is a lot of work in our city being extras in filming movies/shows and they have shown an interest (which I would foster, post-pandemic), and also have few expenses at this point (are years away from driving/college). If they earned money at such a young age and it could grow for 6 decades plus...it's a very intriguing concept!

I did this with my kids. They modeled from 3 months to 6 years old. I put all their earnings into a Vanguard Roth IRA. You can deposit as you get the money or do a one time deposit each year. When they started working as teens, they added to it; sometimes we gifted them their earnings to deposit, and they kept their actual earnings. They are now in their early 20's and appreciate the head start on retirement savings and have been diligent about adding to the account each year.