If Your Teenager Has A Part Time Job, You Can Probably Make Them A Tax Free Millionaire In Retirement.
Here’s The Math Quick Read – Teens with any W-2 or self-employment income qualify for a Roth IRA, and parents can fund the full $7,500 annual contribution on their behalf. – Contributing $7,500 yearly from ages 15 to 19, a total of $37,500, grows to roughly $969,000 by age 65 at a 7% average annual return. – Waiting until a child turns 25 to open a Roth IRA silently erases the most valuable decade of compounding growth. – Two retirees, same $1 million, same 4% rule, buy one finished with $1.4 million, the other hit $0 in 12 years
Our free reader guide explains the flaw that separated them, and the income-first method built to avoid it. A high schooler flipping burgers, lifeguarding, or babysitting this summer is sitting on something most adults would trade a lot to get back: five decades of tax-free compounding runway. If your teen has a real paycheck, they qualify to open a Roth IRA, and the numbers that follow are the reason financial planners keep pushing this idea on parents who will listen.
The mechanics are straightforward. The IRS only requires earned income, meaning W-2 wages, self-employment, or gig work, not allowance, gifts, or investment income. There is no minimum age to open or contribute to a Roth IRA.