What is Kids ROTH IRA?

It is same as Roth IRA, but opened by parents when kids are minor. Kids earns income or equivalent income can be deposited to this account.

Why should you open Kids Roth IRA?

Kids Roth IRA can be a powerful way to set them up for long-term financial success for children.

• Early Start: The biggest advantage is the power of compound interest . Money invested in a Roth IRA for a child will have decades to grow and potentially leading a much larger nest egg by the time they reach retirement.

• Tax-Free Growth and Withdrawals: With a Roth IRA, contributions are made with after-tax dollars, but the earnings grow tax-free, and withdrawals in retirement are also tax-free.

• Early Financial Education: A Roth IRA can be a great way to teach children about saving, investing, and the importance of long-term financial planning. It can also help them develop good financial habits early in life.

Visualization Created for Jim's child Alex: Alex is 14 years old and started working part time. If Jim can inspire Alex to invest just $50/month on ROTH IRA. i) Alex only invest from 14 to 21 years old ii) Alex do not invest anything after 21 years age. How much money Alex will have when Alex turns 60?

With 11.03% return, Alex would have close to half a million and with 14.56% return it will be close to $2 million dollars+ when Alex will be celebrating his 60th birthday. More importantly entire money will be TAX FREE.

The above table is the projection of the balance by the age considering different lifetime return percentage of four (4) Fidelity Funds which are in existence for more than 30 years.

Thank you and keep building your legacy through Generational Wealth! Take care and don't forget to enjoy the journey and take care of your health.

Note : Please note that the calculations are estimates based on certain assumptions, such as variable annual returns. This blog post is intended to illustrate the potential long-term benefits of consistent saving and investing, not to provide specific financial advice. The information presented on this blog, including any visualizations or projections based on average historical data, should not be considered financial advice. Investing involves inherent risks, and the value of investments can fluctuate significantly.

Call To Action : Open a ROTH IRA for your child NOW!