Would it be a good idea for a 14 year old to open a Roth IRA with the help of his parents?

Question

Where can you open a Roth IRA?

Answer 1

As other already mentioned, the earlier you start saving the better.

However, your parents can only contribute if you have earned income. The maximum amount that one can add to their IRA is the smaller of either $4000 or their earned income.

Another place where they can put money away for you is to open up a Health Savings Account (a limit of about $2700 a year).

Best wishes.

Answer 2

Unfortunately, you have to have earned income in order to contribute money to an IRA. I'm not about to suggest that a 14 year old get a job, so I'll suggest something else instead.
Rather than putting it in an IRA, put it in a safe, interest bearing account, such as CD's, short term bonds, or a money market. You might not get as much interest as the IRA, but it will be steady.
Next, when you're older, and you have a job, you can pull the money out of savings to put into the IRA. You'll be able to contribute up to $3000 per year, or your earned income, whichever is smaller.This will allow you to keep your money and contribute to the IRA at the same time. And yes, it's legal.
I will encourage you to get started with saving. At your age, with good habits, you could be very very wealthy by the time you retire (or before).
Good Luck, and thank your parents!

Answer 3

If you are looking at this for a long time retirement investment, definately!!! If you are thinking more for a college fund there may be other plans that will be more advantageous to you. Go to a bank with your folks and ask about investments. If you looking at a system of regular deposits, then definately consider that after-tax fund; however, for a one time or occasional deposit look into just mutual funds or stocks or bonds. The IRA should be a long term automatic savings system. If your parents contribute $2,000 a year to a savings plan over just the next 5-6 years for you (every year) and then stop after 5-6 years, you should be a millionaire by the time you retire from work at 65 (or earlier) and can then just live off the interest without working another day of your life. How is that for financial security???

Answer 4

I would have to disagree and say no. At 14 you should probably invest in tax-deferred savings accounts for college such as 529 plans or ESAs. As long as the money is going to be used for college, this is the direction you should go with. A financial advisor or bank can set this up for you. If you've already have college funds taken care of, then yeah. A Roth is a great idea. Remember, enjoy life now though.

Answer 5

Absolutely. The sooner the better. Retirement is just the beginning of a whole new lifetime for people nowadays since people are living longer and longer! Save for safetly. Great idea.