Q. Does money in a child's Roth IRA account impact college financial aid?
A. A child's custodial Roth IRA is NOT considered as an asset that could affect financial aid eligibility. In fact, no qualified retirement assets (no matter is it under parents or a child's name) will affect financial aid eligibility.
Q. What are the benefits of opening a child Roth IRA account?
A. While it's after-tax money, money in the Roth IRA account will be tax free to grow and withdraw. Given the long investment horizon for a child, the compounding effect will be enormous.
Q. What are the requirements to meet in order to open a Child Roth IRA account?
A. There is no age limitation on Roth IRA, the only requirement is that the child must have earned income (for example, through summer job). If a parent has a business, you can pay the child for work and get deduction, the child can use the money to fund a Roth IRA. However, money for house chores is not viewed as a taxable income.
Q. Where to open a child Roth IRA account?
A. Fidelity does not support Child Roth IRA accounts, but Vanguard does, which is a great option given its huge selection of low cost funds, especially no trading cost ETFs.
A. A child's custodial Roth IRA is NOT considered as an asset that could affect financial aid eligibility. In fact, no qualified retirement assets (no matter is it under parents or a child's name) will affect financial aid eligibility.
Q. What are the benefits of opening a child Roth IRA account?
A. While it's after-tax money, money in the Roth IRA account will be tax free to grow and withdraw. Given the long investment horizon for a child, the compounding effect will be enormous.
Q. What are the requirements to meet in order to open a Child Roth IRA account?
A. There is no age limitation on Roth IRA, the only requirement is that the child must have earned income (for example, through summer job). If a parent has a business, you can pay the child for work and get deduction, the child can use the money to fund a Roth IRA. However, money for house chores is not viewed as a taxable income.
Q. Where to open a child Roth IRA account?
A. Fidelity does not support Child Roth IRA accounts, but Vanguard does, which is a great option given its huge selection of low cost funds, especially no trading cost ETFs.
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