Getting it Right - Welcome

The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.

I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.

My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.

It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.


Getting it right on Politics, Economics, and Personal Finance

An index/schedule of past and future posts and their dates will always be updated so that it becomes the first post that you see below. If the date of a post that you wish to read is preceded by the word "Posted", then find it below or click on the title in the Blog archive to review.

Blog Archive

Wednesday, January 28, 2026

Trump Accounts - How to Maximize Returns

 

Trump Accounts - How to Maximize Returns

The first $1,000 is put there by the government. Some employers are putting in matches for their employees. The accounts won’t be open for contributions until July 2026, but parents of eligible kids can sign up using Form 4547 from the Internal Revenue Service. If just $1,000 more is added by an employer, parent, grandparent, or anyone else, then based on long term stock market history, that account could grow to over one million dollars by retirement. A total of $4,000 added yields $2.5 million dollars. $9,000 added could make the account grow to over 5 million dollars by the child's retirement age. Keep in mind that contributions to this account can be made every year util the child reaches 18 years old.

Very important - Trump accounts can be opened for any previously born child under the age of 18. Those children just won't receive the initial $1,000 contribution from the government. Newborn contributions stop after 2028, but the accounts can still be opened after that year. However, just like the newborn child, contributions to it by others can be made. So do take advantage of that!!

Now to make this account, whose withdrawals are taxable, deliver even more money to your child in retirement, when that child is older and working, withdraw money each year from the Trump account and put it in a Roth IRA. Take out enough each year to put in the maximum allowed into a Roth IRA. In addition, if the child's employer has a Roth 401K plan, contribute the maximum allowed through normal payroll deductions to it. If that is not affordable for the child, then make it affordable by replacing the amount deducted from his paycheck, by withdrawing that amount from the Trump account.

Depending how much money was added to the child's account over the years until age 18, the Trump account may hit zero at some point, possibly way before retirement by following my recommendations, or it may remain large enough to make withdrawals for IRAs for many years. Yes, all those recommended withdrawals would be taxed. However, likely it will be decades later before the child is old enough to retire. The withdrawn amount put into Roth IRAs and or 401Ks would likely have doubled and re-doubled several times by that time. After age 59 1/2, all the withdrawals that the child makes in retirement will be tax free, thus saving a fortune in taxes over the long run.

Parents can contribute up to $2,500 annually in pretax income, much like they do for retirement accounts. Parents’ employers, relatives, friends, local governments and philanthropic groups can also pitch in. Yearly contributions are capped at $5,000, but contributions from governments and charities don’t count toward that total.

Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)