Roth IRAs are amazing tax saving tools. Roth IRAs allow investors to grow their money tax-free. Even though there is no deduction for contributions, a Roth IRA provides the dual benefits of tax-free accumulation and tax-free distributions after age 59 1/2. The long-term benefits can be significant.
Funding your Roth IRA is usually one of the best financial decisions you can make. Roth funding puts your money where it will never be taxed again during your lifetime. Those benefits are just extended the younger you are.
You need earned income to fund your Roth IRA, but, although it is a little known fact, household work such as this does indeed qualify as earned income even if the employer is the child’s parents.
Here you can find our article series detailing how and why you should fund a custodial Roth IRA for your children.