There is no doubt that the Roth individual retirement account is becoming one of the most popular accounts on the retirement scene. It's been around for over two decades, mesmerizing investors with its tax-free income opportunities and flexible withdrawal rules. 

But here's the perk that makes the Roth IRA extra special: no age requirements. This is a big deal because most goodies can't be unlocked until you reach a certain age. 

If you don't have an inkling of how the Roth IRA works for kids, here's a speedy lesson to get you acquainted with the benefits.

Toddler on smartphone under money rain.

Image source: Getty Images.

The 411 on Roth IRAs for kids 

Opening a Roth IRA is one occasion where age will not limit participation. Savers of all ages can contribute money they've already paid taxes on, and they can invest in assets that can boost their portfolio. The earlier you get started, the more tax-free income you have the chance to generate later. 

A kid can rack up the benefits of a Roth, though they will most likely need a custodian to manage the account on their behalf until they are 18. A guardian, parent, or another adult can check out top brokerage products such as Fidelity's Roth IRA for Kids to get started. 

When it comes to funding a Roth IRA, you don't have to worry about kids getting the short end of the stick because of age. Kids have the same contribution limits as adults, qualifying for a maximum contribution up to $6,000 in 2021. But you have to make sure that the total contributions for the year do not exceed the child's earned income. 

Follow the rules before diving in 

Before you dump all your extra money or your kids' spare change into a Roth IRA, make sure they meet the annual requirements.

First, a child must have earned income. This is a nonnegotiable for anyone who wants to contribute to a Roth IRA. Some kids earn extra cash from mowing the lawn, babysitting, or taking on a summer job. Whatever the source of your child's income, make sure you document it and work with a CPA or tax professional to ensure you've reported everything correctly. 

Then, make sure your child doesn't exceed the income threshold for the year. Kids typically aren't earning six-figure salaries, so the income rules usually aren't a big deal. Only once your children start making the big bucks will they no longer qualify to make Roth contributions.

That's why age can be a key ingredient to Roth IRA success. If you help your kids start early and invest consistently, they will be able to benefit from the power of compounding over decades. 

Starting early could be your child's advantage

Let's say you open a Roth IRA for your 13-year-old who works as a babysitter or mows lawns. If your child makes $6,000 doing that work and you and your child contribute $6,000 every year ($500 a month) and earn a 7% return, your child could be a millionaire by age 50. 

But if your child doesn't start their Roth IRA journey until 25, they may not see millionaire status until they are in their 60s. That's not too shabby, either, but starting earlier could be key to helping your children reach their first million-dollar retirement milestone before income limits take away their ability to contribute to a Roth IRA.

Generally, it makes sense to contribute to a Roth IRA now if you think you'll be in a higher tax bracket later. That's usually the case for kids. They haven't reached their highest-earnings years yet, so it's an ideal time to stuff the account with funds now.

The opportunities are endless 

The Roth IRA is not the only way to help your kids retire rich, but it's a great way to drill some powerful lessons into them early. Since children won't be able to claim every penny in their account 100% tax-free until they've reached 59 1/2, they will learn the power of patience. That's one trait that will pay dividends for life.

But if your kids are ever in dire need of funds, they can withdraw what they've contributed without worrying about taxes or penalties. There are also special provisions in the tax code that allow savers to withdraw money to pay for college or buy a home.

If you own a Roth IRA, you can add a child as a beneficiary and pass on your pot of tax-free earnings. Just make sure you explain to your child how an inherited Roth IRA works so they can maximize their benefits. 

Giving a child the tools to win in life is every parent's dream, and tacking on a Roth IRA to your child's success plan may unlock other opportunities that you've never imagined.