Think of the kids.

Retirement planning is usually all about you. It involves making investment decisions that ensure you’ll be able to do the things you want to do when you’re retired …. like eat. Your children are a secondary concern. If you don’t plan well for your retirement, your kids might wind up having to spend their money on things for you … like food.

But there is an unusual and fascinating little subset of retirement planning in which you, the still-working adult, make plans for your children’s retirement.

The cool thing about it is that it can create an extraordinary basket of wealth that your offspring can use in their golden years, decades after you’ve already starved to death.

It’s a complicated scheme. And you’ll certainly want to consult with accountants, lawyers and investment professionals if you decide to try it.

The key to the system is to open a Roth IRA for your child while they are young. In fact, the younger they are, the better. The power of time and compounding interest is what makes this thing work.

Read: Can Kids Invest and Start Saving For Retirement?

Now as a general rule, children aren’t supposed to have Roth IRAs. But the IRS makes an exception if the kid has earned income.

Now a paper route or lemonade stand probably isn’t going to cut it. Rather, this scheme works best if you, loving parent that you are, hire your child in a family-run business.

We first came across this idea at the Beginner’s Investing site at We’ll let writer Joshua Kennon explain how your baby can earn enough money (and pay taxes on it) to qualify for a Roth IRA.

“That might seem like a problem for a 9 months old baby but it isn’t as insurmountable as you think.  If you or a family member owns a business, hire the child to act in commercials, to appear in print ads, or on billboards. What is a tax deductible expense to you becomes income to them, taxed at a much lower rate, and is capital they can put aside into their Roth IRA.  Once they get a little older, hire them to do chores or mow the lawn.  When they are teenagers, let them get their first job.  They could then put their entire paycheck into the Roth IRA and then you could give them a spending money allowance equal to whatever their paycheck was.”

Just how lucrative could this be?

According to Kennon, setting aside $500 a month for your little pride and joy, putting it a low-cost fund and reinvesting all the dividends, and then forcing the child to continue contributions when he becomes an adult, would mean your little baby could retire with a nest egg of …. get ready for it … $29.4 million.

Read more about the idea here.

Then put junior to work.

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