Can My 17-Year-Old Grandson Invest in a Roth IRA?


Dear Penny,

My 17-year-old grandson is working after school and putting half of his salary in a savings account. His grandfather and I have prepaid his college tuition, so he will have no big expenses there.

I would like for him to invest in a Roth IRA. In doing so, he would not be tempted to withdraw the money. He will be 18 in June if that is a requirement. Is this a smart thing to do?

-J.

Dear J.,

In theory, this is a great idea. The big advantage of a Roth IRA is that you pay upfront taxes on the money you invest in exchange for unlimited tax-free growth. Since your grandson is 17, I’m guessing he doesn’t have a big tax bill. If he has the discipline not to touch that money for four or five decades, even a small amount invested now could have a huge payoff at retirement time.

But that part bears repeating: Your grandson needs to be willing to not spend this money for several decades. That’s a big ask for a 17-year-old.

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Before I go any further, let me explain the rules: Anyone can fund a Roth IRA as long as they…



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