Project a custodial Roth IRA started in the child's teens.
Balance at child's retirement
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Total contributed
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Tax-free growth
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Your breakdown
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Why a teenager's Roth is the best account they will ever own
Time is the only ingredient compounding cannot fake, and a child has more of it than anyone. A custodial Roth IRA, opened by a parent or guardian under the minor's Social Security number, lets a working kid funnel part-time earnings into an account that grows and is withdrawn completely tax-free in retirement. Because the money goes in after tax at a child's near-zero tax rate, there is essentially no cost to the front-end deduction they are giving up. What they gain in exchange is fifty years of untaxed growth. This calculator projects exactly how large that head start becomes.
The one hard rule is earned income. A child can only contribute up to the lesser of what they actually earned or the annual IRA limit, which is $7,000 for 2026. Babysitting, lawn mowing, lifeguarding, a W-2 summer job, or genuine work in a family business all qualify, provided the wages are real and documented. Unearned money like allowance or birthday cash does not count. The contribution does not have to come out of the child's own pocket, though. A parent can gift the cash and let the teen keep their paycheck, as long as the deposit never exceeds earned income.
Modest deposits, enormous endings
The projection compounds each year's contribution at your assumed return and stops adding new money at the age you choose, then lets the balance ride to retirement. Small numbers early dwarf large numbers late because of how many doubling periods they get.
Eight years of $3,000, then five decades of growth
Picture a 14-year-old who contributes $3,000 a year through age 21, stops at 22, and never adds another dollar. At an 8% annual return the account compounds untouched until age 65. The contributions and the growth split like this.
Roughly $24,000 of real money turns into more than $940,000, and every cent of it can be withdrawn tax-free after age 59 and a half. Note how little of the final balance is contributions. The growth bar below towers over the deposits bar, and that gap is the entire argument for starting young.
A common misconception about access to the money
Parents worry the account locks the cash away until the child is 60, but a Roth is more flexible than that. Contributions, the after-tax dollars that went in, can be withdrawn at any age with no tax or penalty, because that money was already taxed. Only the earnings face the under-59-and-a-half penalty and ordinary tax if pulled early outside an exception. There are carve-outs too: up to $10,000 of earnings can fund a first home, and contributions can pay qualified education costs penalty-free. So a Roth started at 14 can quietly double as a backstop for a first apartment or college without sacrificing its retirement mission.
Who is this calculator for?
Parents and grandparents of a working teenager who want to see the long-run payoff of seeding a Roth now. It assumes a single steady contribution and a flat return, so treat the output as a clean illustration rather than a market forecast. Real returns will swing, and most families will not max out every year.
What happens to the account when the child becomes an adult?
A custodial IRA legally belongs to the child the whole time. Control transfers to them at the age of majority in your state, typically 18 or 21. At that point they can manage it themselves. This is worth discussing with a teen early so the account becomes a lesson in patience rather than a surprise windfall to be spent.
Do I need to file a tax return for my child to contribute?
Not necessarily for the Roth itself, but you must be able to document the earned income. For self-employment work like babysitting or yard care, keep a simple log of who paid, how much, and when. If the child's net self-employment earnings exceed the filing threshold, they may owe self-employment tax and need to file, so keep records clean.