How many times have you heard, “Don’t talk politics, religion or (in Wisconsin) ‘da Bears’?”
We will try to obey that maxim today and avoid politics. While politics is divided between red and blue, in finance, we don’t like either. Red commonly indicates negative numbers. Blue is not much better as it typically indicates a down or depressed feeling. So instead of red or blue, let’s make your child’s future golden.
The current administration has given parents a new option to start their kids off on the right financial foot with the new Trump Accounts. Starting July 5, 2026, all U.S. children under the age of 18 with a valid Social Security number will be eligible to establish a Trump account. Parents or legal guardians can open and manage accounts on behalf of their children.
Families and even employers can contribute up to $5,000 per child per year. The money will be invested in a diversified portfolio of “low-cost index funds designed to maximize long-term growth while minimizing risk.” But as we know, all investing includes some risk. These funds will grow tax deferred and can be accessed without penalty when your child turns 18 for qualified expenses like education, a first-time home purchase, or starting a business. Distributions will be taxed as ordinary income.
The primary ingredient in making any financial plan work is time. The power of compounding can make a little contribution become a great big balance if given enough time. The one thing that your child has in spades is time. Parents who open an account and make modest contributions now, may see their child’s account grow over time into the headstart on a home, car, or college education. And children born between January 1, 2025 and December 31, 2028 will receive a $1,000 boost from the US Treasury. You can also contribute, and when your child has income, they can contribute as well.
To set up an account go to trumpaccounts.gov and click ‘Get Started’ to complete tax form 4547. Then get back to tickling toes and peek-a-boo, while your child’s future starts taking shape.
Did You Know?
Your employer sponsors this financial wellness benefit from Francis. The benefit connects you with down-to-earth financial planners who educate and advise on any money matters…without the sales pitch. We are exclusively engaged by employers like yours and have no investment products to sell, so you can feel confident that you will always receive objective advice.
Your financial planner will help you set priorities and achieve your money goals, without judgment or financial jargon. Know that all discussions are kept strictly confidential. This service is offered as an employee benefit with no per-session co-pays, so you can meet with a financial planner as often as you wish. Services are paid by your retirement plan or your employer.
Connecting with a financial planner is easy! Here’s how:
- Visit FrancisWay.com > Services > Participant Portal
- Call (866) 232-6457
Download the free mobile app (Search for Francis LLC)
Visit the Learning Library
