You have undoubtedly heard about new federally seeded investment accounts for children commonly referred to as Trump Baby Accounts.  Regardless of politics, here’s what matters from a financial planning standpoint.

Spoiler alert – there are still some unknowns, and we expect the rules to change over the next 17 years. 

What Are Trump Baby Accounts?

Trump Baby Accounts are proposed federally seeded investment accounts for children that may include:

• A $1,000 government deposit for eligible birth years (2025–2026).  May be extended for future years.
• Up to $5,000 per year in contributions
• Tax-deferred growth
• Conversion to something similar to a traditional IRA at age 18.  Might be possible to convert to a Roth IRA.  Important details on both still being worked out, so stay tuned. 
• Withdrawals taxed as ordinary income, most likely
• You can open these accounts for older children, but they will not receive the seed money

Who Benefits Most?

• Children born in 2025 or 2026 (eligible for seed money)
• Families wanting flexibility beyond education-only savings
• Grandparents looking for gifting opportunities (aren’t we all?)

Important Differences

Unlike a 529 plan:

• Withdrawals are not tax-free for education
• The child gains control at age 18

Unlike custodial accounts:

• Growth is tax-deferred
• Investment options may be more limited

Should You Open One?

If eligible, it likely makes sense to:

• Capture the government seed deposit of $1000.  Some companies are also contributing on behalf of their employees. 
• Coordinate contributions with 529 funding
• Consider the impact of control transferring at age 18.  The child will likely pay taxes (at his/her rate) plus a 10% penalty if the funds are actually withdrawn at age 18, per the current plan.  Subject to change.

Trump Baby Accounts are best viewed as a complementary planning tool — not a replacement for 529 plans or other strategies

How do we open a Trump Baby Account?

Once fully implemented:

1. Confirm eligibility (U.S. citizen child with Social Security number)
2. Open through a participating brokerage or financial institution, likely not before July.  The custodian will guide you through the process to receive the seed money.
3. If your child was born in 2025, you can start the process with your 2025 tax return via Form 4547, but you do not have to do it this way 
4. Fund annually (up to $5,000 in total from all family members)
5. Invest according to program guidelines; most likely will be limited to an S&P Index 500 Fund

We expect major custodians to offer these accounts once final rules are in place.

As always, we are happy to help you work through the scenarios here. 

Linder Financial Services is a dba of Thayer Partners LLC, (“Thayer”).  Thayer is an SEC registered investment adviser.   SEC registration does not constitute an endorsement of Thayer by the SEC nor does it indicate that Thayer has attained a particular level of skill or ability.  This material prepared by Thayer is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.  Opinions expressed by Thayer are based on economic or market conditions at the time this material was written.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Thayer, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Thayer does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.

We are so excited to welcome…

 Eliana, daughter of Marci’s son Bradley and daughter-in-law Maayan, born in July 2025.

And

Cooper, son of Lori’s daughter Jordan and son-in law Matt, born in January 2026.

Everyone is doing great!

Happy 2026!

For 2026, there are plenty of changes which impact IRA’s and 401K’s so we will just cover the major ones here. There could be additional changes later in the year of course.

For 401K/403B/457/TSP:

• The maximum employee contribution has been increased from $23,500 to $24,500. The catch-up contribution for employees age 50 and over has been increased from $7,500 to $8,000 for a total of $32,500. The catch-up limit remains at $11,250 for active participants who are between 60 and 63 years of age. This brings the total employer plan contribution to $35,750 for these employees. In some cases, the catch-up contribution must be made to a Roth employer retirement plan.

For Traditional IRAs:

• Contribution limit increases from $7,000 to $7,500 for 2026. The catch-up contribution for those age 50 and over has been increased to $1,100 for a total of $8,600. The income tax deductibility level has been increased. We will review with you individually as needed.

For ROTH IRAs:

• Contribution limit increases to lower of earned income or $7,500 for each spouse. Catch-up contribution of additional $1,100 is for age 50 and over.
• Contribution eligibility has increased:
  • Full contribution with Adjusted Gross Income (AGI) increased to $153,000 for a single taxpayer. Phase-out between $153,000 and $168,000. We can help with the phase-out math.
  • Full contribution for each with total Adjusted Gross Income (AGI) less than $242,000 for married/filing jointly taxpayers. Phase-out between $242,000 and $252,000. We can help with the phase-out math.
• 2025 contributions (of $7,000 or $8,000 if age 50 or over) can be made until April 15, 2026. Let us know if you plan to do this so we can ensure the deposit gets applied to the correct year.

Call with questions or if we can help get these changes made for you.

Linder Financial Services is a dba of Thayer Partners LLC, (“Thayer”).  Thayer is an SEC registered investment adviser.   SEC registration does not constitute an endorsement of Thayer by the SEC nor does it indicate that Thayer has attained a particular level of skill or ability.  This material prepared by Thayer is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.  Opinions expressed by Thayer are based on economic or market conditions at the time this material was written.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Thayer, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Thayer does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.

As promised earlier in the month, we are now going to re-introduce you to Roth IRA’s, but this time, as great financial gifts for your lucky and hard-working children or grandchildren.  As I said earlier, there are very few investments which grow tax free, but 529 plans and Roth IRA’s do just that!
Many of you are familiar with Roth IRA’s, but for those of you that are not, here is a brief overview:    

Roth IRA’s were created by the Taxpayer Relief Act of 1997 to help Americans save for retirement.  These IRA’s have become enormously popular in the last 20 years but there are some important considerations:

• The dollar contribution limits are the same for Roth IRA’s and traditional IRA’s.  Eligibility for a Roth IRA requires “earned income,” subject to an income cap which is not present for traditional IRA’s. 
• Contributions are made with after-tax dollars, unlike those in traditional IRA’s or most company sponsored retirement plans.
• Because the contributions are made with after-tax dollars, the contributions can be withdrawn at any time, without tax or penalty.  This might be important for young investors like your children or grandchildren who might need the money they invested before retirement.
• Unlike traditional retirement plans, the earnings can also be withdrawn tax-free, subject to owner age and account duration rules, and there is no requirement for distributions to begin at any age.

As I said above, there is a requirement for the Roth IRA account holder to have “earned income” in order to be able to contribute BUT the actual contribution can be funded by anyone (YOU in this case) as long as the dollar amount of the contribution does not exceed the owner’s earned income or annual maximum allowed.

Head spinning?  How about an example?  You have a 19 year old grandson who worked over the summer stocking shelves in the middle of the night for Kroger.  He earned $2000 and will receive a W-2 from Kroger.  I am guessing he probably can’t invest this $2000 in a Roth IRA because he is saving every penny for college, BUT you can fund it for him.  You have until April 2026 to make this 2025 Roth contribution.  We will help you understand eligibility requirements and then help you actually pull this off.

Want to read more about Roth IRA’s?  See attached link. https://www.investopedia.com/terms/r/rothira.asp

Linder Financial Services is a dba of Thayer Partners LLC, (“Thayer”).  Thayer is an SEC registered investment adviser.   SEC registration does not constitute an endorsement of Thayer by the SEC nor does it indicate that Thayer has attained a particular level of skill or ability.  This material prepared by Thayer is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.  Opinions expressed by Thayer are based on economic or market conditions at the time this material was written.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Thayer, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Thayer does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.

Back by popular demand, the next two Bernie’s BLOG posts will provide info on some great financial holiday gifts for you, your children, or grandchildren.  This blog will cover 529 educational plans and the next one will re-introduce many of you to Roth IRA’s.   By the way, we are not suggesting that you forego fun gifts for your offspring, but we really like the idea of longer term not nearly as “fun” gifts to help secure the financial futures of your lucky family members. 

As many of you know, there are very few investments which grow tax-free, but 529 plans and Roth IRA’s do just that, at least for now. 

529 plans are state run educational savings plans which can be used for very broadly defined educational expenses for adults or children.  These funds can be used for pre-college, trade school or college tuition/fees.  The investments in a 529 plan can be made by anyone, subject to gift tax requirements, and are made with after-tax dollars although some states offer a state tax credit to parents who contribute in their state of residence (North Carolina does not offer this credit at this time).  The funds in a 529 plan can be moved to another child and the funds do not have to be used in the state in which the plan was funded.  Unlike other investments, 529 plans are controlled by the account “owner”,  not by the child.  Taxes and penalties are due if money is not used for educational expenses, but again, the definition of educational expenses is quite broad and usually includes computers, books, and room and board.   There has also been an important change to 529 plans – up to $35,000 of unused funds can now be rolled over to a Roth IRA for the child, subject to lots of rules of course. 

These plans carry low management fees because they tend to be “target date” funds where the investment mix is automatically rebalanced as the child gets closer to college age. 

Although 529 plans are not LFS managed assets, we would be happy to assist you in starting one for your children or grandchildren, or even yourself!  There is no minimum dollar requirement to open an account and dollars can be added throughout the year. 

If you want to read up, see link below, or feel free to call us to talk more. 

https://www.investopedia.com/terms/1/529plan.asp

Linder Financial Services is a dba of Thayer Partners LLC, (“Thayer”).  Thayer is an SEC registered investment adviser.   SEC registration does not constitute an endorsement of Thayer by the SEC nor does it indicate that Thayer has attained a particular level of skill or ability.  This material prepared by Thayer is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.  Opinions expressed by Thayer are based on economic or market conditions at the time this material was written.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Thayer, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Thayer does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.

Many thanks to all of you who joined us for our  “Age-Proof Your Brain” virtual event with Dr Milstein.  We hope you enjoyed it as much as we did!

For those of you who could not join us (or even for those of you who did 😊) we want to share what we found to be the most impactful, and perhaps surprising, actions we heard to get the most out of our brains every day now and in the future.  Overall, it’s clear that little changes go a long way.  Thank goodness!

• Optimizing our sleep was the most important action we can take, although we all know this is much easier to say than to actually do!  Suggestions include getting outside for 10 minutes every morning soon after waking up, avoiding sleep aid medications and getting rid of those little bits of light in our bedrooms, including our cell phones. 
• Learning new things to work our brains is important.  While doing Sudoku and crossword puzzles may make us better at doing Sudoku and crossword puzzles, learning lots of new things is absolutely essential.  And learning new things is a very broad goal!  Almost everything counts, including learning all of these new financial tools that we are sharing with you.  Those count for us and for you! 
• Managing stress, although surprisingly, some stress is good for our brains.  The stress has to be managed and actually go away sometimes though.  Not sure how that works.  Another webinar required. 
• Treating underlying conditions which can impact brain health.  These include hearing loss, inflammation, sleep apnea, heart conditions, gum disease, diabetes etc.  Surprisingly, the dementia risk from these and other underlying conditions can be almost eliminated by just consistently using the currently available treatment options.  New science is a good thing, but the existing science is pretty darn good too. 
• Being social.  This includes calls and meetings with your financial advisor as long as we talk about things other than money – which we always do.  Check this one off. 
• Doing moderate exercise.  No marathons required.  Walking 30 minutes a day, especially outside and with a friend is all it takes.  Even better is dancing.  Apparently so because it ticks several boxes – learning new things, being social and exercising. 
• Eating real foods.  This is defined as limiting (not eliminating) “foods” which don’t spoil.  We heard that real foods include coffee, tea, and wine.  And chocolate. 
• Practicing mindfulness.  This includes deep breathing exercise, being in nature or staring at the plant in your kitchen.  The challenge here is doing this one without adding stress.  Let us know how this goes.  We have been told that staring at your Schwab accounts on our computers does not count as practicing mindfulness.  For us or for you!

Since this virtual event was so popular, we are talking about our next virtual event which will be social for sure and allow us all to learn new things.  Watch this space!