Retirement Planning

In 2026, you’ll likely start hearing about “Trump Accounts,” a new savings vehicle for children under 18. As media coverage increases, our goal is to help you understand what they are, how they work, and whether they make sense for your family.  For more detailed information, we recommend you visit TrumpAccounts.gov.

Trump Accounts Overview

Established through the Working Families Tax Cuts Act, Trump Accounts offer tax-advantaged growth for children under 18. If you’re thinking about your family’s financial future, here’s what you need to know about these accounts and how they fit into your broader planning strategy.

Trump Accounts are IRA-style investment accounts designed specifically for U.S. citizen children under 18. They’re administered through IRS.gov and offer tax-deferred growth similar to traditional retirement accounts.

Eligibility: Any U.S. child with a Social Security number can have an account opened on their behalf.

Incentives: 

• Children born between January 1, 2025, and December 31, 2028, will receive a $1,000 government deposit to start their account.
  
  
• A $250 bonus is available for the first 25 million children aged 10 and under who meet certain income bracket requirements.

Contribution Limits: Starting July 5, 2026, parents and guardians can contribute up to $5,000 per year using Form 4547.

Growth: Funds are invested in a market index and grow tax-deferred until the child reaches age 18, when it transitions to a traditional IRA.

Withdrawal Procedure

At age 18, account holders can withdraw funds without penalties for three specific purposes:

• Education expenses
• Purchasing a first home
• Starting a business

This flexibility sets Trump Accounts apart from 529 Accounts that limit usage to education only. The tax treatment of withdrawals depends on how the funds are used, similar to how Roth IRAs handle qualified distributions.

If the funds remain untouched, they continue growing tax-deferred. The compounding potential over decades could result in substantial savings by the time the account holder reaches their 50s or beyond.

Planning for the Future

For families with the capacity to fund multiple savings accounts, Trump Accounts add another tool to the planning toolkit. The government seed deposit provides a meaningful head start, and the withdrawal flexibility at age 18 gives the next generation more options beyond pursuing higher education.

Whether you’re a parent just starting to think about your child’s financial future or a grandparent looking to leave a legacy, these accounts deserve a place in the conversation.

Want to discuss how Trump Accounts fit with your family’s broader financial plan? We’ll help you think through the strategy that makes sense for your situation. Give us a call at 952-460-3290. 

If you’re approaching your 70s, you’ve likely heard about Required Minimum Distributions (RMDs). The governing rules have changed significantly in recent years. With the SECURE Act 2.0 now fully in effect, it’s important to understand where the rules stand today and what they mean for your retirement future.

A Golden Age

For decades, Americans were required to begin taking RMDs at age 70½. The RMD starting age has increased twice since 2018, and with the SECURE Act 2.0, RMDs start the calendar year you turn age 73 (for everyone born prior to 1960).

If you turn 73 this year, that means 2026 is your first RMD year. You’ll have until April 1, 2027 to take your first distribution. Before you assume delaying is the smart move, there’s an important catch to consider.

While you can delay your first RMD, doing so means you’d be taking two RMDs in the same tax year. Your first RMD (for 2026) would be due by April 1, 2027, and your second RMD (for 2027) would be due by December 31, 2027.

Two distributions in one calendar year means double the taxable income, which could affect your tax brackets, the tax you pay on investments, social security taxes and even your Medicare premiums.

For many people, it makes sense to take that first RMD before December 31 of the year they turn 73, spreading the impact across two calendar years. However, the best choice depends on your specific situation and overall financial plan. Which is why this kind of decision benefits from professional guidance.

More Breathing Room

Missing an RMD used to carry significant consequences, but the SECURE Act 2.0 reduced that penalty considerably. The new base penalty is 25% of the amount you failed to withdraw. Even better, if you catch the mistake and correct it quickly (filing Form 5329 and taking the missed distribution within the correction window), the penalty drops to just 10%.

While this reduction provides a safety net, the goal should always be to complete your RMDs accurately and on time. Working with an advisor can help ensure you stay on track year after year.

The SECURE Act 2.0 brought many changes to the RMD system, and it isn’t done yet. The law includes a future provision that will push the RMD starting age to 75 beginning in 2033. If you’re not yet in your 60s, this change will likely apply to you, giving you additional time for tax-deferred growth.

Be aware that more years of tax-deferred growth means larger account balances and potentially larger RMDs when they do begin. For some individuals, this creates opportunities for proactive planning in your 60s and early 70s. There are many strategies that give you more control over your taxable income.

We’re Here to Help

RMD planning isn’t just about taking a distribution by a deadline. It’s about integrating those required withdrawals into your broader tax strategy, coordinating them with charitable giving goals, considering their impact on Medicare premiums, and ensuring they align with your long-term financial plan.

If you’re turning 73 this year or approaching that milestone, now is the time to review your RMD plan with a professional. A qualified advisor can help you understand your specific distribution requirements and avoid costly mistakes. We specialize in building strategies that minimize taxes while keeping you in full compliance.

Give us a call at 952-460-3265. Let’s sit down and create a strategy that works for your unique situation.

The U.S. Treasury’s announcement to discontinue the penny marks a significant shift in American currency policy. While this may seem like a minor change, there are several areas of impact worth discussing.

The Economics of Penny Production

The decision to eliminate the penny is, at its core, an economic one. According to the U.S. Mint’s 2023 Annual Report, it costs 3.69 cents to produce and distribute each penny. With approximately 3.2 billion pennies minted in 2024, this equates to a loss of roughly $118 million in production costs.

The composition of the penny has evolved over time in an attempt to reduce these costs. Since 1982, pennies have been made of 97.5% zinc with a thin copper plating. Even with this cost-saving measure, the penny remains unprofitable to produce.

International Precedent

The United States would not be pioneering this change. Several countries have successfully eliminated low-denomination coins:

• Canada discontinued its penny in 2012
• Australia eliminated its one and two-cent coins in 1992
• New Zealand removed its one and two-cent coins in 1990

Studies from these countries provide valuable data on the transition’s impact on inflation, consumer behavior, and retail operations.

What This Means for Consumers

The most common concern about eliminating the penny involves pricing and rounding. Based on international models, here’s how you can expect pricing to work:

Credit cards, debit cards, checks, and electronic payments maintain exact pricing. No rounding occurs. For cash transactions, costs will be rounded to the nearest five cents. 

• $0.01 and $0.02 round down to $0.00
• $0.03 and $0.04 round up to $0.05
• $0.06 and $0.07 round down to $0.05
• $0.08 and $0.09 round up to $0.10

According to a 2014 study by the Bank of Canada, the impact of rounding on consumers was negligible. Most businesses absorbed small rounding differences rather than adjusting their overall pricing strategies. Some transactions rounded up, others down, resulting in a wash. Similarly, the Bank of Canada’s study found no measurable inflationary impact from penny elimination.

For the average consumer, the transition will likely be seamless. During the transition period, pennies remain valid for all transactions and banks will continue to accept pennies for deposit or exchange.

Don’t Pinch Pennies When It Comes to Your Future

The penny may be going away, but the principle behind “a penny saved is a penny earned” continues to remain true. The key is making sure you’re not so focused on the pennies that you miss the dollars. Don’t let uncertainty about retirement keep you counting pennies when you should be building wealth. 

Ready to get more than just our two cents on your retirement strategy? Let’s sit down and create a comprehensive plan that helps you maximize every dollar you’ve worked so hard to earn.

Give us a call at 952-460-3290.