Kids Planning for Retirement? Use a Roth IRA

ROTH IRA and traditional IRA. Panchenko Vladimir/Shutterstock

If you’ve reached or are reaching retirement, you’re probably in one of two circumstances. You’ve either planned for retirement and are secure, or you’ve put planning off and are in a panic. Everyone told you to start early, but just how early?

It’s said that you’re never too young to start planning, and this could mean beginning as a minor. As long as a minor makes an income, they can start saving for retirement with a Roth IRA. This can help them feel secure 50 years down the road. But how does this work for a child, and is it worth it?

Kids’ Monies Grow With Roth IRA

Although traditionally Roth IRAs have been retirement vehicles for adults, a child can use a Roth IRA for retirement savings as well. It works out for them because of their youth. Children can have decades of tax-free growth and few worries about retirement. Another advantage of starting this early is aggressive investing. They don’t need to sit in a low-risk balanced fund.