If the teen is self-employed (babysitting), keep a simple log of dates, jobs, and payments in case of an IRS audit.
Wages from a part-time job (W-2), or 1099 income from "gig" work like babysitting, lawn mowing, or dog walking. solo teen ira
Every dollar earned via investment growth is withdrawn tax-free in retirement. If the teen is self-employed (babysitting), keep a
They can contribute 100% of their earnings up to the annual limit ($7,000 for 2024/2025). 💰 Roth vs. Traditional: Why Roth Wins They can contribute 100% of their earnings up
Set up a small monthly transfer to teach the "pay yourself first" habit.
By starting just 10 years earlier, the teen ends up with the money at retirement. 🛠️ How to Set It Up
Starting at age 15 versus age 25 creates a massive difference in final wealth due to compounding. Starting Age Monthly Contribution Total at Age 65 (7% Return) $524,000 25 $262,000