Give the next generation the tools to build fearlessly.

Are you looking for a way to help your child or grandchild build a financially stable future? You may be surprised to learn that children can have their own IRAs—and starting early can lead to a significant long-term advantage.

There’s no minimum age to open an IRA. As long as your child has earned income—from babysitting, mowing lawns, working in a family business, or even a part-time job—you can open an account in their name and start building their financial foundation.

🧠 Why Consider a Roth IRA for a Child?

Thanks to the power of compound interest, even small contributions made in childhood can grow into something big. For example:

Saving $7,000 annually from age 14 to 24 and earning just 7% per year could grow to over $1 million by age 61—even with no additional contributions after age 24.*

This hypothetical example is for illustrative purposes only. It assumes a consistent 7% annual return, which is not guaranteed and does not reflect actual investment results.

Helping your child build strong financial habits early doesn’t just set them up for wealth—it gives them a sense of control, confidence, and clarity for life’s financial decisions.

A Roth IRA is often a great choice for children because:

• Contributions (not earnings) can be withdrawn at any time, tax- and penalty-free
• Withdrawals of earnings can eventually be completely tax-free
• Children are typically in a low tax bracket, making the Roth especially effective

👣 Getting Started is Easier Than You Think

Here are the 5 easy steps covered in our free guide:

1. Open an IRA for any child with earned income—many banks now offer “guardian IRAs” for minors.
2. Gift the contribution—your child can spend their paycheck while you fund the IRA.
3. Choose a Roth IRA for long-term flexibility and tax advantages.
4. Invest for growth, not just safety—kids have time to weather market ups and downs.
5. Keep good records—make sure the income is documented and “on the books.”

At Richmond Brothers, we believe empowering families starts early—and when you give a child the tools to build wealth and make smart decisions, you help them live more fearlessly now and far into the future.

⚖️ A Few Things to Keep in Mind

While starting a Roth IRA for your child can be incredibly beneficial, it’s not the right fit for every situation. Here are a few things to consider:

• Your child must have earned income to contribute. That means actual, documented work—gifts or allowances don’t qualify.
• Contribution limits apply. For 2025, the maximum is $7,000 or the amount of earned income—whichever is less.
• Funds invested in a Roth IRA are meant for the long term. While contributions can be withdrawn without penalty, earnings may be taxed and penalized if withdrawn early.
• Not all children may value saving at a young age. It’s important to involve them in the process and explain why it matters.

As with any financial strategy, it’s a good idea to consult with a financial professional before opening an account to ensure it’s the right move for your family.

📥 Download the full guide:
👉 Using IRAs to Help Children in Five Easy Steps (PDF)
Provided by Ed Slott & Company, LLC

📞 Have questions or want help getting started?
Call our office at (517) 435-4040 to schedule a visit. We’ll help you take the next step—clearly, securely, and with your family’s long-term confidence in mind.

Start early. Think long-term. And help the next generation live fearlessly into—and far beyond—their own version of retirement.