Imagine your 8-year-old child spends the summer walking dogs for a few hundred dollars. Instead of spending it, or even putting it in a basic savings account, you open a retirement account in their name. You’re not only helping them save, but you’re also building a nest egg for their retirement decades from now.
More U.S. parents are doing just that by setting up custodial versions of the Roth IRA for young children with earned income. With long time horizons and favorable tax rules, and questions about the fate of Social Security, it just makes sense.
