What is a Custodial Roth IRA?
A Roth IRA your child owns, with you managing it until they turn 18-21. Child must have earned income (job, freelance, modeling). No income limits. $7,500/year max contribution (2026).
How It Works
Child earns: $5k from summer job or babysitting. You contribute: Up to $5k to child's Roth IRA. Growth: Tax-free forever. At 65, $5k becomes $200k+ (50+ years at 7% returns).
Opening a Custodial Roth
Requirements: Child needs SSN or ITIN. Parent/guardian needs SSN or ITIN. Both can be provided at Fidelity, Vanguard, or E*TRADE. See how ITIN holders open brokerage accounts.
Contribution limit: Child's earned income (max $7,500/year in 2026).
Withdrawals: Can withdraw contributions anytime (tax-free). Earnings locked until age 59.5 (with some exceptions for education, first home).
Earned Income Sources
- W-2 job: Part-time, summer work (most reliable)
- Self-employment: Babysitting, lawn mowing, freelance (1099)
- Family business: Legitimate wages (documented, reasonable)
- Modeling/acting: W-2 or 1099 from agency
For ITIN Families
US-born children: Get SSN automatically, can open Roth immediately if they earn income.
Foreign-born children: Can get ITIN if they have US tax filing requirement (earned income). May be harder if child is undocumented or non-resident alien.
Tax filing: Child must file tax return if earnings exceed the standard deduction (~$14k in 2026). Even if they owe $0 tax, filing documents the income for Roth contribution.
Frequently Asked Questions
What is a custodial Roth IRA?
A Roth IRA an adult opens and manages for a minor who has earned income. The child owns the account; the adult custodian controls it until the child reaches the age of majority (18–21, depending on the state).
Can my child have a Roth IRA if we use ITINs?
The child needs a taxpayer ID (SSN or ITIN) and earned income. Many brokerages can open a custodial Roth with an ITIN — call to confirm. Contributions cannot exceed the child’s earned income for the year, up to the annual IRA limit ($7,500 in 2026).
What counts as earned income for a child?
Pay for real work — babysitting, lawn care, or a reasonable wage for actual tasks in a family business. Allowance, gifts, and investment income do not count.
Why open a Roth IRA for a child?
Decades of tax-free compounding. Money invested young has the longest runway to grow, and qualified Roth withdrawals in retirement are completely tax-free.