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Author: piz Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75776  
Subject: IRA for teenager Date: 5/28/1998 10:24 AM
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My son is applying for his first job this summer. Is there a lower limit on the age for starting an IRA? What other issues might be involved for him?

Thanks,
Piz
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Author: TchrP Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3499 of 75776
Subject: Re: IRA for teenager Date: 5/28/1998 12:25 PM
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>> My son is applying for his first job this summer. Is there a lower limit on the age for starting an IRA? What other issues might be involved for him?
-------------------
There's no minimum age; the only requirement is having earned income at least equal to the amount being contributed.

Others have reported that it is difficult, however, to set up an IRA for a minor. This is because accounts for minors require a custodian, usually a parent, while IRAs also require a custodian, usually a bank. But I think that people have done it successfully -- it may take some shopping for a broker prepared to handle it, and perhaps someone who has done it will be able to provide details.

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Author: PSUEngineerFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3501 of 75776
Subject: Re: IRA for teenager Date: 5/28/1998 12:48 PM
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<<There's no minimum age; the only requirement is having earned income at least equal to the amount being contributed.>>

To add to TchrP response, the actual earned income does not have to go into the IRA. If your son has an earned income of $1500, this means you could contribute $1500 to the IRA and let your son save his money for future college expenses.

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Author: piz Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3502 of 75776
Subject: Re: IRA for teenager Date: 5/28/1998 1:21 PM
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PSUEngineerFool wrote:
<<<<There's no minimum age; the only requirement is having earned income at least equal to the amount being contributed.>>

To add to TchrP response, the actual earned income does not have to go into the IRA. If your son has an earned income of $1500, this means you could contribute $1500 to the IRA and let your son save his money for future college expenses.>>

Yes, I understand I can do that as long as I don't contribute more than his gross earned income (or the contribution limit if he earns that much). That's what I was thinking of doing, although I didn't want to come right out and say it in case the IRS has planted listening devices in my brain. See my post in the Tax Strategies message board for my current encounter with the IRS. ;-)

Thanks,
Piz

P.S. Go Lions! (I'm PSU '83)


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Author: TchrP Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3503 of 75776
Subject: Re: IRA for teenager Date: 5/28/1998 4:30 PM
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Here's another thought: if your own income doesn't exceed the limits, you could put $500 into an Education IRA for your son, too. His earnings have no bearing on that.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3506 of 75776
Subject: Re: IRA for teenager Date: 5/28/1998 5:50 PM
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<<Others have reported that it is difficult, however, to set up an IRA for a minor. This is because accounts for minors require a custodian, usually a parent, while IRAs also require a custodian, usually a bank. But I think that people have done it successfully -- it may take some shopping for a broker prepared to handle it, and perhaps someone who has done it will be able to provide details.>>

I've been told that Vanguard will set up an IRA for minors.

Regards...Pixy

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