How Young Can You Be to Open a Roth IRA

You can open a Roth IRA at any age, but you must have earned income to contribute

There is no minimum age to open a Roth IRA account itself. A child, teenager, or young adult can have one. The real requirement is earned income — money you made from working, not gifts, allowances, or investment returns. You cannot contribute more than you earned that year, and you cannot contribute at all if you had zero earned income.

A parent or guardian can open and manage a custodial Roth IRA on behalf of a minor. The child's name is on the account, but the adult controls it until the child reaches the age of majority (usually 18 or 21, depending on your state). Once the child turns 18 or reaches the age set by your state law, they take control of the account themselves.

The reason age matters less than income is that the IRS ties contribution limits to what you actually earned. A 12-year-old with a summer job can contribute to a Roth IRA. A 25-year-old with no income cannot.

Key Takeaways

• A minor can open a custodial Roth IRA with a parent or guardian as the account owner until they reach the age of majority in their state.
• Contributions are limited to the amount of earned income the child received that year, not to the standard annual contribution limit.
• Earned income includes wages from a job, self-employment income, and modeling or acting fees, but not allowances, gifts, or investment gains.
• The account grows tax-free and can be withdrawn tax-free in retirement, making early contributions powerful because of decades of compound growth.

What counts as earned income for a minor

The IRS defines earned income narrowly. It includes W-2 wages from an employer, self-employment income (like babysitting or lawn care), and modeling or acting fees. It does not include allowances, gifts from relatives, investment income, or money from a trust.

If your child works for your business, the income must be real work at a reasonable rate. The IRS scrutinizes family businesses, so keep records: a written job description, hours worked, and pay stubs or invoices. A 14-year-old filing papers in a parent's office for $50 an hour will draw questions. A 14-year-old doing genuine work at market rates will not.

Self-employment income counts too. A teenager who mows lawns, babysits, or sells items online can contribute based on that income. You report self-employment income on Schedule C (Form 1040) when you file taxes, and that number becomes the contribution limit for the Roth IRA.

How much a minor can contribute each year

The contribution limit for a minor is the lesser of two numbers: the standard annual Roth IRA limit or the child's total earned income for that year. If the standard limit is $7,000 (the amount varies by year and is set by the IRS), but your child earned only $3,500, they can contribute only $3,500.

This rule actually favors young workers. A 16-year-old who earned $2,000 from a summer job can put all $2,000 into a Roth IRA. That money then grows tax-free for 50+ years. A 45-year-old with the same $2,000 in earned income can also contribute $2,000, but it has only 20 years to grow before retirement.

The contribution must come from the child's own money or from a parent who is funding it on the child's behalf. The child cannot borrow the money or receive it as a gift and then contribute it — the contribution itself must come from earned income or parental funds designated for that purpose.

Opening and managing a custodial Roth IRA

To open a custodial Roth IRA, you choose a brokerage or bank that offers them. Major firms like Fidelity, Vanguard, Charles Schwab, and E-Trade all offer custodial accounts. You will need the child's Social Security number and the parent's or guardian's identification.

The account paperwork names the child as the beneficiary and the adult as the custodian. The custodian makes all investment decisions and contribution decisions until the child reaches the age of majority. After that, the child becomes the sole owner and can make their own choices.

Some custodians restrict what investments are available in a custodial account — for example, they may not allow options trading or margin accounts. Check the rules before you open the account. The investment options (stocks, bonds, mutual funds, ETFs) are usually the same as in an adult account, just with fewer risky strategies available.

Tax treatment and withdrawal rules for minors

Contributions to a Roth IRA grow tax-free, and withdrawals in retirement are tax-free too. For a minor, this means the money compounds without any tax drag for decades. A $2,000 contribution at age 16 could grow to $20,000 or more by age 65, depending on investment returns, and none of that growth is taxed.

A minor can withdraw their own contributions (not the earnings) at any time without penalty or tax. If a 17-year-old contributed $2,000 and it grew to $2,200, they could withdraw the $2,000 contribution penalty-free. The $200 in earnings would stay in the account until they are 59½ or meet another exception.

Earnings withdrawn before age 59½ are subject to income tax and a 10% penalty, with narrow exceptions for first-time home purchases, education expenses, and a few other situations. This is why the Roth is powerful for minors: contributions are always accessible, but earnings are protected for long-term growth.

When the child takes control of the account

At the age of majority in your state (18 in most states, 21 in a few), the custodian's authority ends and the child becomes the sole owner. The custodian should provide the child with account statements, investment information, and login credentials. Some custodians require the child to formally accept the account; others transfer it automatically.

Once the child is the owner, they can make their own contribution decisions, change investments, and eventually withdraw money. They also become responsible for understanding the rules — for example, that they cannot withdraw earnings before 59½ without penalty, or that they can contribute only up to their earned income for that year.

A parent can continue to help manage the account or advise the child, but the legal control has shifted. If the child wants to close the account or move it to another custodian, they can do so without the parent's permission.

Frequently Asked Questions

Can a child with no job open a Roth IRA?

No. The child must have earned income to contribute. However, a parent can open the account and fund it if the child has earned income from work. The contribution cannot exceed what the child actually earned that year.

What if my child earned $500 but I want to contribute $2,000 to their Roth?

You can contribute only $500 — the amount they earned. The IRS ties the limit to actual income to prevent tax avoidance. If you want to give your child more money, you can gift it to them outside the Roth, but it cannot go into the Roth as a contribution.

Does the child have to file taxes if they open a Roth IRA?

If the child had earned income, they may need to file a tax return depending on the amount. A custodial Roth IRA itself does not trigger a filing requirement, but the income that funded it might. Check IRS rules for the year or consult a tax professional.

Can I move money from a custodial Roth to a regular Roth when my child turns 18?

Yes. Once your child is the account owner, they can manage it like any other Roth IRA. There is no conversion needed — the account simply transitions from custodial to individual ownership. The money stays in the same account and keeps growing tax-free.

What happens to the Roth IRA if the child dies before age 59½?

The account passes to the beneficiary named in the account (usually a parent). The beneficiary can withdraw contributions tax-free and penalty-free at any time. Earnings are subject to tax but not the 10% early withdrawal penalty. The rules vary slightly by custodian, so check your account documents.