Trump Account thoughts

[X13]

My kid got the free $1000, not planning on adding any extra. Just going to let it ride

 

[Gulf of America]

My 3-week-old will get the $1000 and I’m pretty sure my 2 1/2-year-old will qualify for the $250, but I don’t anticipate putting in any more than that. Even being comfortably upper-middle-class and lucking into buying a house before the COVID surge, it still gets pretty complicated to put extra into our retirement, pay $25k a year for daycare, contribute to two 529 college accounts, AND get our kids’ retirement started at birth.

If the kids don’t go the college route, they can roll the 529 into a Roth IRA, and I just have to count on instilling enough financial sense in them to build their own retirements. As long as I do my part on my retirement, they should get a windfall when I go, because family history makes it likely I’ll run out of time before I run out of money.

 

[Bonasababy]

My 3-week-old will get the $1000 and I’m pretty sure my 2 1-2-year-old will qualify for the $250, but I don’t anticipate putting in any more than that. Even being comfortably upper-middle-class and lucking into buying a house before the COVID surge, it still gets pretty complicated to put extra into our retirement, pay $25k a year for daycare, contribute to two 529 college accounts, AND get our kids’ retirement started at birth.

If the kids don’t go the college route, they can roll the 529 into a Roth IRA, and I just have to count on instilling enough financial sense in them to build their own retirements. As long as I do my part on my retirement, they should get a windfall when I go, because family history makes it likely I’ll run out of time before I run out of money.

Be aware the money had to have been in the 529 for 15 years and there's a limit of 35K that can be rolled over. Also earned income requirements and annual limits I think apply. Remember they broadened what 529's can be used for though. Not just for college, trade school/equipment etc. much more is covered. Most kids will be able to spend some unless they go into something that costs them nothing for a career.

 

[BuzzH]

SS is such a scam. I think something like this could be a way to wean us off SS. It is kind of like the young bucks at work complaining about no pension. I tell them the matching 401 and hours bonus they get is a better deal

Better deal if they have discipline...statistically they don't.

 

[sigpros]

Better deal if they have discipline...statistically they don't.

You are correct about that

 

[Flatrock]

Wonder how many parents or parents to be wont sign up for the free money that their kid will receive, because its titled a "trump account" ?

I hope none! Everyone eligible for free money should sign up.

The idea of Trump Accounts was started by a hedge fund manager and philanthropist named Brad Gerstner. He is a great investor and seems like a great person. It has been a project of his for quite a few years and he originally called it Invest America. Ted Cruz introduced it as legislation and the name was eventually changed to Trump Accounts.

It is an amazing idea IMO but it's too bad the name got changed. I don't think it's been politicized too badly but I think it would have been received better from the entire public if the name had remained Invest America.

 

[sigpros]

Wonder how many parents or parents to be wont sign up for the free money that their kid will receive, because its titled a "trump account" ?

For me, you could call it biden, obama, clinton, stalin, or mao account - my obligation to do whats best for my kids is independent of politics.

It didnt make sense for me, much the same as @TOGIE.

That is crazy. The TDS really clouds peoples judgement. I just hope this whole thing at least gets people looking into finical literacy. I wish I would of known about it 27 years ago when I started my job. I was a young guy and listened to the old men about my pension and SS saying I would be GTG, and basically 30 years ago they were right to an extent. Man if I would of been putting even 10% away I would really be set. I just got into it about 7 years ago from a coworker who told me about it. I work with a bunch of Liberals and one guy just had a kid and won't do it because it has trumps name on it. Sad thing is he actually does invest and knows how it works. I ran the numbers the $1250 seed money at 7% return in 55 years is $101,591.08 at 10% return its $612,963.41! just for a couple mouse clicks. If this had Kamala's name on it and I could sign them up I would.

 

[SAJ-99]

Sad thing is he actually does invest and knows how it works. I ran the numbers the $1250 seed money at 7% return in 55 years is $101,591.08 at 10% return its $612,963.41! just for a couple mouse clicks.

The sad part is most of the people that get it, and those it is intended to help, will liquidate it as soon as they can.

Here is a test. only 15% of Americans get all the answers correct.

 

[Wildabeest]

The sad part is most of the people that get it, and those it is intended to help, will liquidate it as soon as they can.

Here is a test. only 15% of Americans get all the answers correct.
View attachment 412001

If you answered “don’t know” to all of them, is that considered a correct or incorrect answer?

 

[SAJ-99]

If you answered “don’t know” to all of them, is that considered a correct or incorrect answer?

I will post the answer key once it jumps to the next page. If those were your answers, you can assume you didn't do well.

 

[BuzzH]

That is crazy. The TDS really clouds peoples judgement. I just hope this whole thing at least gets people looking into finical literacy. I wish I would of known about it 27 years ago when I started my job. I was a young guy and listened to the old men about my pension and SS saying I would be GTG, and basically 30 years ago they were right to an extent. Man if I would of been putting even 10% away I would really be set. I just got into it about 7 years ago from a coworker who told me about it. I work with a bunch of Liberals and one guy just had a kid and won't do it because it has trumps name on it. Sad thing is he actually does invest and knows how it works. I ran the numbers the $1250 seed money at 7% return in 55 years is $101,591.08 at 10% return its $612,963.41! just for a couple mouse clicks. If this had Kamala's name on it and I could sign them up I would.

First of all, the presidency isn't supposed to be about branding everything with your name on it. This isn't some reality TV show.

IMO, the answer isn't as simple as philanthropists and the .gov giving people money to save for their kids, it should be about EDUCATING them on the power of investment over time, compounding interest, etc. It should also be presented how taking that investment money and buying something you "need" today, like a new boat, a new car, a fancy vacation today...will cost you more than the sticker price.

I also think balance should be taught as well, as I have friends that are so hung up on investing, they forgot to have some fun along the way. I think there needs to be recognition that you really can do both, invest for the future and have plenty of fun, if you have a plan and stick to it.

What needs to happen is for kids to learn about this stuff starting in grade school and continuing through high school. Like you, I got extremely lucky and took some advice from a very close and good friend of mine. I just got more lucky as I took his advice over 30 years ago. He got lucky and learned about investing from his Dad and Uncle who recognized the importance of investing when it wasn't really a popular idea. I also think that retirement/investment apps should be standard on every cell phone sold.

To go with all that, we need jobs that pay enough to allow investment to happen as well. It's tough to tell people they "need to invest", teach them how to do it, then pay them chickenshit wages that barely cover living expenses...let alone having enough to invest.

IMO, this isn't a horrible idea, but it's too much giving someone a fish and not enough teaching them HOW to fish.