Earned income includes wages, salaries, commissions, and self-employment income. This may come from domestic work, such as mowing the lawn or any job that you'd hire an outsider to do, provided that your teen keeps good records and receives a reasonable wage. Records should indicate the type of work performed, the number of hours worked, and the amount earned. Regardless of the amount of the contribution, he or she should understand that the money must remain untouched to give it time to grow. Children's IRAs are established as custodial accounts.
Colleges generally consider a smaller percentage of parents' assets in the financial aid equation.
However, depending on the school, IRA holdings may be excluded from the calculation. Opening a Vanguard IRA To establish an IRA, you need to complete an IRA Adoption Agreement. Once you finish the application form, you need to print it, sign it, and mail it to us. For the application only, go to the IRA Adoption Agreement . The registration section in the agreement should state that the owner is a minor.