Can a 5-Year-Old Have a Roth IRA?
- by Lisa Jackson
- Feb 21
Discover how to legally open a Roth IRA for your toddler—even with lemonade stand income! Learn IRS rules, contribution limits, and why starting early could mean $1M+ tax-free.
Introduction
Most parents assume retirement accounts are for adults—but what if you could give your 5-year-old a $1M head start? Thanks to Roth IRAs for kids, it’s possible! Here’s how to legally open one (and why you should)
Yes, a 5-year-old can have a Roth IRA—if they have earned income
- The IRS allows minors to contribute to a Roth IRA as long as they earn income from work (not allowances or gifts).
- 500frommodeling,alemonadestand,orhelpingwithafamilybusiness.You can contribute up to 1007,000/year in 2024)
How to open a Roth IRA for your child
Avoid “fake” income. The IRS may audit if contributions don’t match realistic earnings even with lemonade stand income! Learn IRS rules, contribution limits, and why starting early could mean $1M+ tax-free.
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