What Is the Minimum Age Requirement for an IRA?

Financial advisers recommend saving for retirement with an IRA, and the sooner the better. Imagine how much money might be accumulated if you started saving as a child. There is no minimum age requirement for an IRA, since a minor can have an IRA under certain conditions.

Opening an IRA

The IRA for Minors is an individual retirement account set up for minors—those under age 18—by their parents or guardians. The account must be set up by the custodian (a parent or guardian), who has to sign the application.

Earned Income

The key to establishing an IRA for a minor is whether he has "earned income." If he does not, no retirement account can be set up. Whatever earnings come from a part-time job can be invested in an IRA. The earnings must be compensation income from a job like babysitting or a paper route. Contributions to the IRA cannot exceed the child's earnings for that year. Also, any investment earnings the minor makes do not qualify and cannot be used to fund an IRA.

Traditional vs. Roth IRA

A minor can have either a Traditional or Roth IRA. The former allows for tax-deductible contributions, and withdrawals are taxed as income. The latter takes after-tax contributions so that withdrawals can be tax-free. For minors, the Roth IRA may be more beneficial, since a minor's earned income does not generally produce a tax-deduction benefit.

Benefits of Roth IRA

Because the assets in a Roth IRA grow tax-free, by saving early a minor can build greater wealth by capitalizing on compounded growth.


Keep in mind that the account belongs to the minor. At age 18, she takes control of the account and can withdraw money as she chooses.