Can a 15 Year Old Open a Roth IRA?

A Roth Individual Retirement Account (IRA) offers a way to save for retirement with unique tax benefits, where contributions are made with after-tax dollars, and qualified withdrawals in retirement are tax-free. A 15-year-old can open a Roth IRA, but this is subject to specific conditions related to their income and how the account is structured.

Eligibility for a Minor’s Roth IRA

A fundamental requirement for any individual, including a minor, to contribute to a Roth IRA is having “earned income.” The Internal Revenue Service (IRS) defines this as compensation for personal services performed, such as wages, salaries, or tips from a part-time job, or net earnings from self-employment, distinguishing it from passive income sources like gifts or allowance.

For a 15-year-old, this could include income from babysitting, mowing lawns, dog walking, or working at a retail establishment or restaurant. It is important that this income is legitimate and documented, possibly through pay stubs, W-2 forms, or detailed records for self-employment activities. While there is no minimum age to contribute to a Roth IRA, the presence of earned income is the primary qualifier.

The Custodial Account Framework

Since a minor cannot legally open or manage an investment account independently, a Roth IRA for a 15-year-old must be established as a custodial account. These accounts are typically set up under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). A custodial account is managed by an adult, known as the custodian, for the exclusive benefit of the minor.

The custodian, often a parent or legal guardian, has the responsibility to manage the investments within the account and ensure that all contributions comply with IRS regulations. Although the custodian makes investment decisions, the assets legally belong to the minor from the moment they are contributed. Upon reaching the age of majority, which is usually 18 or 21 depending on state law, the control of the account formally transfers to the now-adult individual.

Establishing and Funding the Account

Opening a custodial Roth IRA for a 15-year-old involves choosing a financial institution that offers these specific account types, such as brokerage firms or mutual fund companies. The application process will typically require identifying information for both the minor and the custodian. This includes the minor’s Social Security number and the custodian’s Social Security number and government-issued identification. The custodian will complete the necessary application forms, which may be available online or in paper format, and provide their signature.

Once the account is established, contributions can be made, but they are subject to annual limits set by the IRS. For 2025, the maximum annual contribution to a Roth IRA is $7,000, or the individual’s total earned income for the year, whichever amount is less. This means if a 15-year-old earns $2,500 in a year, their total contribution to the Roth IRA cannot exceed $2,500, even though the general limit is higher. Contributions must be made in cash or cash equivalents, such as through direct deposits or checks.