When I was a teenager I worked and had a summer job. My parents helped me open a savings account and that started my path towards saving. I wouldn’t say I was saving for retirement, but I’d like to believe I started to understand the concept of saving.
Today there are many opportunities to help a child invest for their future, and teach a child the importance of saving. While the savings accounts still exist, there are tax efficient ways to teach a child to save for their future, such as with a Roth IRA.
Here’s how Roth IRAs work – an adult sets up the Roth for the benefit of a child. Once the child reaches majority (may be 18 or 21 depending on the state you reside in), the adult then transfers the account to the child’s name. Children under the age of 18 are eligible to contribute to a Roth IRA.