Roth IRA minimum income

[Guest dfiler]

My 16 year old had a $2200 income. Can I start a ROTH IRA for her?

[John G]

The answer depends upon what type of income your child has. You need to make the decision based upon "earned income", which means anything with a W2/paycheck but also includes newspaper routes, babysitting, etc. Interest and dividends do not count as earned income.

You may need to check with a couple of institutions to find one that will accept a minor Roth account. Last time I checked, Etrade said no, Schwab said yes. It is not an IRS issue but what kind of business the custodian is trying to attract.

[Guest benefitsguy]

Have you looked at other products? If she is only 16, what is the money for? College? How much does she want to contribute? future contributions...?

DON'T make your decision on what you hear people are doing... base it on her situation, goals and objective.

A Roth might not be the best thing for her. Before anyone can give you advise on which product to use, they need to base their results on the persons life style, goals and objective. This means time frame on when to use the money.

Get educated.