Help your grandchild foot the bill for college to avoid big student debt later. By Sandra Block, Senior Editor From Kiplinger's Personal Finance, June 2015 Helping your grandchildren avoid student debt is a worthwhile endeavor, but it’s not the only way you can safeguard their financial future. See Also: 6 Ways to Help Your Grandkids Pay for College As long as your grandchild has earned income, he or she is eligible to own a Roth individual retirement account. She doesn’t have to fund the account with her own money, however. You can match her earnings dollar for dollar, up to a maximum of $5,500 in 2015. Your grandchild won’t get a tax deduction for Roth contributions, but most young people don’t make enough money to benefit from a deductible IRA, says Charles Bennett Sachs, a certified financial planner with Private Wealth Counsel, in Miami. As long as your grandchild waits until age 59½ to withdraw money, all of the earnings will be tax-free. And thanks to the powerful effect of compounding, those tax-free earnings could be substantial by the time your grandchild retires. Suppose you contribute $5,500 to your 16-year-old grandson’s Roth IRA and make annual contributions for another 10 years. By the time your grandchild is 26, he’ll have nearly $85,000 (this assumes a 7% average annual return and that the maximum contribution is adjusted for inflation). If he continues to make annual contributions on his own after the 10 years, he’ll have nearly $3.2 million in savings when he turns 65. By comparison, if your grandchild waits until age 30 to open a Roth, he’ll have about $1.49 million in the account when he turns 65. “You can never replace those early years,” Sachs says.