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Roth IRA for Kids

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Can you open a Roth IRA for your kids? Sure.

There are a few requirements, but if your child qualifies, it can be a fantastic investment account for your kids.

Roth IRAs offer tax free growth on the contributions, making it a very attractive investment vehicle for young investors that can take advantage of decades of compounding.

Requirements for a Roth IRA for Kids

Minimum Age:

None. Your child can open a Roth IRA at any age as long as he meets the income requirements.

Income Requirements:

Your child must have taxable earned income to contribute to a Roth IRA. Income from a summer job qualifies, but investment income, like interest and dividends, does not qualify.

Contribution Limits:

The yearly Roth IRA contribution limit is the lower of their taxable earned income for the year or the maximum contribution limit of $5,000 in 2010.

Funding:

Even though your child must have earned income reported on the child's tax return, he does not have to contribute the money to the Roth IRA; you can fund the Roth IRA with your own money.
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