Does it really make sense to start a retirement account for my child?

Opening a retirement fund for a child means opening a custodial IRA. Generally speaking, a custodial account is one that’s owned by an adult — a parent, grandparent, or legal guardian — on behalf of a minor.

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Custodial IRAs are offered by many brokerages, so you’ll need to choose where to open yours. This could be the brokerage where you currently have your investment accounts or a different one.

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On the application for a custodial IRA, the brokerage will typically ask for specific information.

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Step 3: Choose an IRA Type

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Once you’ve opened a retirement account for a child, you can fund the account using your linked bank account and then make your investment selections.

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Does it really make sense to start a retirement account for my child?

Opening a retirement fund for a child means opening a custodial IRA. Generally speaking, a custodial account is one that’s owned by an adult — a parent, grandparent, or legal guardian — on behalf of a minor.

Custodial IRAs are offered by many brokerages, so you’ll need to choose where to open yours. This could be the brokerage where you currently have your investment accounts or a different one.

Step 1: Choose a Brokerage

On the application for a custodial IRA, the brokerage will typically ask for specific information.

Step 2: Complete the Application

Step 3: Choose an IRA Type

Should you choose a traditional or a Roth IRA for your child? Both offer tax benefits and both have the same annual contribution limits for kids. For minors, a Roth IRA typically works better.

Once you’ve opened a retirement account for a child, you can fund the account using your linked bank account and then make your investment selections.

Step 4: Fund the Account and Choose Investments

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Finding a financial advisor doesn’t have to be hard. SmartAsset’s free quiz matches you with fiduciary financial advisors in your area or who serve your area. If you are ready to be matched with financial advisors that can help you achieve your financial goals, take the quiz now.

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