Stacy Lobermeier, age 17, works at Sbarro in Cottonwood Mall. Starting a teen's Roth IRA with their first job can pay big in the future.

Having children make Roth IRA contributions when they get their first job could have major benefits, according to a Smart Money article.

Roth IRAs, rather than regular IRAs, are beneficial for children because they can withdraw money for other expenses if needed without having tax penalties.

Comment on this story

Not having a tax-deductible contribution will probably not be a problem, because any other deductions are unlikely to be more than the standard deduction of $5,950. Generally, that is the advantage of a traditional IRA compared to a Roth.

While teens are unlikely to save all their money, if they make a meaningful contribution each year, it can dramatically help retirement savings. For example, a 15-year-old will have saved just under $89,000 at 60-years-old if $1,000 is contributed for three years and the return is 8 percent.