- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Brokerage account for child
Posted on 5/29/26 at 8:07 am
Posted on 5/29/26 at 8:07 am
Need some help. My preteen son started his own business recently and is making pretty good money from it. I'm helping him out and trying to use it as a learning experience as far as business expenses go as well as investing his profits. With that said, what would be the best way to go about opening a brokerage account for him to invest his money, as I'm not sure if there is an age limit to do that? Any help with that would be appreciated to point me in the right direction. Also, any thoughts as what to invest in? Currently it'll be less than 1k he'll be starting with.
10
Posted on 5/29/26 at 8:21 am to RedBeardBaw
It kind of depends on what you want.
You could always set up a custodial account and hand it over when he turns 18.
You may also want to look into the new Trump accounts that will be available in about a month. He won't be eligible for the one-time $1k contribution from the government, but it would still essentially act as a retirement account that turns into a traditional IRA @ 18. You would need to look up the limitations on withdrawals to see if that is something you would want to do.
You could always set up a custodial account and hand it over when he turns 18.
You may also want to look into the new Trump accounts that will be available in about a month. He won't be eligible for the one-time $1k contribution from the government, but it would still essentially act as a retirement account that turns into a traditional IRA @ 18. You would need to look up the limitations on withdrawals to see if that is something you would want to do.
Posted on 5/29/26 at 8:24 am to RedBeardBaw
Bring him to Mass on Sunday and remind him the Lord gets the first 10%
Posted on 5/29/26 at 8:28 am to RedBeardBaw
I opened a custodian account for all my grandkids. Funded each with 50% s&p500 and 50% nvda. Have since added to it with 50% s&p and 50% goog. I have a discussion with each kid whenever I add money. Hoping to get them interested. I have had 2 teenagers put in small amounts of their own money.
Posted on 5/29/26 at 8:36 am to RedBeardBaw
custodial Roth IRA would make more sense than brokerage, IMO.
Posted on 5/29/26 at 8:42 am to SuperSaint
quote:God doesnt need my money.
Bring him to Mass on Sunday and remind him the Lord gets the first 10%
Posted on 5/29/26 at 10:36 am to ApisMellifera
Only use these accounts if you get the free 1k and don’t add to it. These accounts are set up badly for returns
Posted on 5/29/26 at 10:42 am to notsince98
quote:
custodial Roth IRA would make more sense than brokerage, IMO.
This is the way
Posted on 5/29/26 at 11:08 am to RedBeardBaw
Depends on your goals for him. A UTMA/UGMA account is the most flexible when it comes to withdrawals. After he turns 18, he can withdraw without penalty. This is a taxable account (only earnings, not contributions since taxes have already been paid on them) and the first $1350 in earnings is tax free, the next $1350 at his tax rate, which may be 10%, then after that it’s taxed at the parents tax rate.
The disadvantage of a Roth is the penalty for early withdrawal before age 59 1/2 (or for a first time home purchase, or other very specific reasons) but if the goal is to invest for his retirement, this may be a good fit.
The other option is a 529 educational account which can only be used to fund education.
I’ve set up a UTMA for my
3 yo grandchild, but may also set up a 529 and/or a Roth later on.
The disadvantage of a Roth is the penalty for early withdrawal before age 59 1/2 (or for a first time home purchase, or other very specific reasons) but if the goal is to invest for his retirement, this may be a good fit.
The other option is a 529 educational account which can only be used to fund education.
I’ve set up a UTMA for my
3 yo grandchild, but may also set up a 529 and/or a Roth later on.
Posted on 5/29/26 at 11:14 am to PlaySomeHonk
quote:
The disadvantage of a Roth is the penalty for early withdrawal before age 59 1/2 (or for a first time home purchase, or other very specific reasons) but if the goal is to invest for his retirement, this may be a good fit.
Not disagreeing, just adding a little more context. He'd be able to withdraw the contributions at any time tax and penalty free. Only the investment returns would incur a penalty.
Posted on 5/29/26 at 11:17 am to tigerbacon
quote:You're right, fhey're not the most efficient since they are funded with post tax contributions then treated as a traditional IRA (taxed at income tax rates instead of lower LTCG rate). Thus, you're paying income tax rate twice. There may be another compelling limited use case to seed Roth conversions especially for older teens as they wouldnt face many years of growth before converting.
Only use these accounts if you get the free 1k and don’t add to it. These accounts are set up badly for returns
Since OP's kid has income I'd fund Roth first. I plan to give a match when mine start working. Several multiples just to make sure they max Roth each year.
I set mine up at 13 with a youth brokerage they can invest in and use for spending on debit card. Will open Roth as soon as they have earned income.
This post was edited on 5/29/26 at 7:44 pm
Posted on 5/29/26 at 11:20 am to RedBeardBaw
Go to Fidelity web site,
Open him a cash management account, Roth IRA, and a Brokerage account.
Open him a cash management account, Roth IRA, and a Brokerage account.
Posted on 5/29/26 at 7:01 pm to RedBeardBaw
Get fidelity or Schwab to help setup a Roth IRA
Posted on 5/29/26 at 7:16 pm to RedBeardBaw
quote:
My preteen son started his own business recently and is making pretty good money from it.
what kind of business so I can get my preteen son making some money?
Posted on 5/29/26 at 8:53 pm to RedBeardBaw
Fidelity has teen account brokerages that can be setup once he reaches 13. He can get a debit card too, if you want one.
Every kid is different, but I think there is value in having an account, seeing some money in it, but not spending it or acting a fool.
Every kid is different, but I think there is value in having an account, seeing some money in it, but not spending it or acting a fool.
Posted on 5/29/26 at 10:00 pm to RedBeardBaw
E Trade is 18 I believe
Posted on 5/31/26 at 12:47 pm to PlaySomeHonk
You can withdraw your contributions from a Roth IRA at any time. You can literally make a contribution Tuesday and withdraw that contribution on Wednesday with no penalties or taxes. You just can’t touch any of the earnings. Common misconception.
Posted on 5/31/26 at 12:56 pm to notsince98
quote:
custodial Roth IRA
Where can I set one of these up?
Posted on 5/31/26 at 1:12 pm to meeple
Every brokerage I've ever used offers custodial Roth even RH.
Posted on 5/31/26 at 1:33 pm to meeple
If you’re a DIY then go to Fidelity or Schwab. If you want guidance get a referral to an advisor. If you find an advisor willing to help then you’ve probably found a good one because many won’t want to open a smaller size account.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News