Your children don’t have to wait until they’re adults to enjoy the tax-free retirement benefits of a Roth IRA. If they're 17 or younger and earn any income at all, they (or you) can match that income with contributions to a Minor Roth IRA.
All the tax-free benefits of Roth IRAs
Like all Roth IRAs, contributions to a Minor IRA are made on an after-tax basis. Earnings grow entirely tax-free as long as the account is owned for at least five years. Withdrawals are also tax and penalty-free if your children take them after age 59½. And they’ll never have to take Required Minimum Distributions.
Establishing a Minor IRA
As a parent, you can establish a Roth IRA as a custodial account on behalf of a child who is 17 or younger. However, you (or they) can only contribute to the account if your child has earned income. That income can come from a part-time job or their own business.
If you own your own business, you may be able to employ your children and pay them wages that can count as earned income for Roth IRA contribution purposes. However, you may want to speak with a tax professional if you’re considering this option to make sure what you’re paying your kids is the appropriate amount for the kind of work they’re doing.
Annual contribution limits
As with “adult” Roth IRAs, annual contribution limits for 2026 are either what your child earns or $7,500, whichever amount is less.
Managing investments
Until your child reaches the age of maturity, you’ll have sole control over how money in their Minor Roth IRA is invested, or you can delegate ongoing investment management to a financial advisor. You may want to let your child view their account online to learn more about investing and witness its potential growth over time.
Assuming ownership
When your child reaches your state’s age of majority (generally 18 or 21) assets in the custodial Roth IRA must be moved into a new regular Roth IRA account under their own name. Once that account is established, they can continue to contribute to it on their own or roll over some or all of the assets into a Roth 401(k) account with their employer.
If you have questions about establishing or contributing to a Minor IRA, consider speaking with a tax professional or financial advisor.
This article was authored by Chris Gullotti and Jeffrey Briskin. Chris is a financial advisor and Partner with Canby Financial Advisors, a SEC-registered investment adviser. SEC registration does not constitute an endorsement by the SEC nor a statement about any skill or training. Chris can be reached at 508.598.1082 or cgullotti@canbyfinancial.com. Jeffrey Briskin is Director of Marketing at Canby Financial Advisors.
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