Saving & Retirement

For teens learning about retirement, the key points are to understand compound interest, open a custodial Roth IRA with earned income, and invest small amounts consistently.

• Learn compound interest: Start by understanding that money earns interest, and then that interest earns its own interest over time.

• Open a custodial Roth IRA: With earned income from a job, a parent or guardian can open a custodial Roth IRA. Because teens are typically in a low tax bracket, contributing now means tax-free withdrawals later in retirement.

• Invest consistently: Even small, regular contributions make a big difference over a long time.