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Can I open a Roth IRA for my 12-year-old son?

By Karin Price Mueller | for

Q. Can I open a Roth IRA for my 12-year-old son? He will get a Social Security check until he is 18. He doesn’t work so he doesn’t have a W-2 but only a 1099-SSA. I want to save money for his college.

— Dad

A. It’s great that you want to save money for college.

A Roth IRA isn’t an option for him at this time.

One of the requirements to contribute to an IRA is that you must have earned income, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

Earned income is salaries, wages and self-employment income, he said.

You said your son doesn’t work so he is ineligible to contribute to an IRA.

But you want to save for college, so you have other options.

Kiely recommends you open a 529 plan, an instrument that was designed for college savings.

“The person who opens the account is the owner — you. The person who the money is being saved for is the beneficiary — your son,” Kiely said. “The owner controls how the account is managed and can change the beneficiary.”

You can contribute up to $15,000 per year into a 529 plan per beneficiary, he said. If you want you can contribute five years’ worth of annual contributions, or $75,000, all at once. A couple can contribute up to $30,000 per year.

“The earnings on your contributions grow tax free over the years,” he said. “Withdrawals from a 529 plan come out tax free if the funds are used for the appropriate purpose.”

That would include paying for tuition, room and board, books, fees, computers and other like expenses.

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Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for’s weekly e-newsletter.


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