Savings goal
Saving for a custodial roth ira
Typical price $100–$7,000. Best for ages 11–17.
Quick take
Not a "thing" goal — the best long-term financial lesson a kid can get. And the compounding is insane.
The parent lens
A $1,000 Roth IRA contribution at age 14, invested in a total-market index, is about $50,000 at age 65 with no additional contributions. The earliest you start, the more absurd the math. This is the single highest-ROI savings goal on the list.
How long will it take?
A teen with earned income can contribute up to what they earned that year (or the IRS annual max, whichever is lower). $1,000 at age 14, growing at 7% real for 51 years, becomes ~$32,000 in today's dollars. Add a parent-match and the case is overwhelming.
At a glance, for a $1000 target
Gotchas
- ×Requires documented earned income (babysitting, lawn care, W-2 job) — keep records
- ×Many brokerages now offer custodial Roth IRAs — Fidelity, Schwab, and Vanguard are the common choices
- ×The tax-free withdrawal rule means this money can legitimately be a first-home downpayment later (Roth contributions are always withdrawable)
FAQs
When can a kid open a Roth IRA?
As soon as they have earned income. The kid needs to have W-2 wages or documented self-employment (babysitting, lawn care with records). No minimum age — we've seen 10-year-olds with custodial Roths.
Should I match my teen's Roth IRA contributions?
It's the single best "financial gift" a parent can give. A 1:1 match up to their earned income max creates life-changing compounding for $1,000-6,000 out of your pocket.