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The Guardian
4 days ago
- Business
- The Guardian
A Trump IRA for kids? It's worth a bit of money. But here are better options
There's Trump Mobile, $Trump coins, Trump watches, Trump sneakers and now … the Trump baby savings accounts! Will it be popular? As a financial adviser, I'm not so sure. The Trump IRA (or individual retirement account) was established as a part of the recently passed 'big, beautiful bill' and aims to help young people save. Parents and employers can annually contribute up to $5,000 into an account for their kids who are under the age of 18. Within limits, the contributions are not taxed to the employee and employers even receive a deduction. What's nice about these accounts is that the income earned as the account grows (hopefully) is also not taxed. And, different from a typical IRA, which penalizes early withdrawals, once the child hits 18 they can withdraw the funds without any penalties. The biggest bonus? For kids born between 1 January 2025 and 31 December 2028, the government will kick in $1,000 to get things rolling. A thousand bucks? For free? Sounds good. And if you had a child this year, take advantage. Take the grand. Let it grow tax-free. At 5% interest it would be worth about $2,400 18 years from now. Why not? But that's all I'd do. Why? Because if your intention is to save money for your kids, there's at least two other strategies that make more sense. One is to lean into after-tax accounts like 529s and Roths. With a 529 account, you can put as much money away for your kids as you want into this after-tax account (be careful of gift tax limitations) and it will grow tax-free until the money is withdrawn. The catch is that the money has to be used for educational costs (tuition, books, fees, etc) at colleges and trade and vocational schools as well as private and religious schools. The new bill now also allows withdrawals to pay for professional certifications such as HVAC or plumbing licensing renewal courses. You can also set up a custodial Roth IRA for your child if they're under 18. One caveat is that the child does have to have actual income (not interest or investment income) from a W-2 wage. Contributions are limited to $7,000 this year and do not reduce taxes. But all earnings are tax-free and savings can be withdrawn at any time. 529s and Roths are good strategies if the goal is to pay for education or put money away for your child's long-term future. But the strategy that I really love? Insurance. Thanks to the advice from a great insurance adviser 30 years ago, I bought whole life insurance policies for my kids. Why? Because by naming them as both the insured and the beneficiary on their policy and then paying the bill, I locked them into insanely low premiums that continue on to this day. For example, even today a $100,000 whole life policy for a newborn might cost about $30 a month. At age 30, the same policy might cost $150 a month. Buying a whole life policy for your kids also gets them tax-free payouts for their families one day if anything – God forbid – happens to them. It also builds up cash over time. A $50,000 policy bought at age five could have $20,000-plus in cash value by age 45. There are more benefits to doing this. Many policies pay dividends each year, which can provide income to the owner. And, different than a 529 plan, you can borrow against a whole life insurance policy without potentially interrupting its benefits or cash buildup as long as you continue to pay the premiums. I have some clients who buy these policies because – in most cases – it can guarantee the ability to get more insurance in the future even if there are health issues. Of course, these are just my opinions based on what I recommend to clients and what has been recommended to me. Your circumstances may be different. So run these numbers – and strategies – by your financial adviser and tailor it to your situation. The Trump IRA has nice intentions but c'mon … it's really just a $1,000 political giveaway that at best will provide beer money for a kid once they hit 18. Sure, take it. But parents can realize a much better return on their investment by putting money away for their kids' future education, retirement or – sorry to say – death. Do this instead of the Trump IRA and your children – and their future families – will be thanking you more.
New York Times
6 days ago
- Business
- New York Times
Saving for College Once Felt Essential. Some Parents Are Rethinking Their Plans.
Before starting a family, Asha Bailey and her husband were already looking for the best ways to plan for their future children's financial security. In their community in San Diego, 529 college savings plans often came up in conversation. Wanting to learn more, Ms. Bailey and her husband visited their credit union to explore opening a 529 account. But when they learned that the plan could be used only for educational purposes, which their children might not require, they weren't thrilled. 'As much as I would love and want to encourage my kids to go to college and further their education, it just might not be what they end up doing,' said Ms. Bailey, 29, who works as a wedding photographer. 'I have no idea the kind of people that they're going to grow up to be. So, for me, I want to have the most flexibility with that money.' Instead, Ms. Bailey and her husband opened a brokerage account after her financial adviser recommended it to them. They liked the idea of withdrawing money in case of emergencies or other expenses not related to just education. For generations, 529 college savings plans were a no-brainer for most parents wanting to start a college fund. They are tax-advantaged and primarily used to pay for higher education expenses. The accounts can be used for a range of education-related expenses, not just college tuition, like books, private K-12 tuition and more. If funds go unused, the account can be transferred to another beneficiary, like a sibling or a grandchild. But now, some parents are pumping the brakes on the accounts and rethinking how they plan to save for their children's future. With growing uncertainty around the value of higher education, and a fear of locking funds into something their child may not use, many of these parents are looking for flexible plans that don't tie their money exclusively to higher education. Want all of The Times? Subscribe.
Yahoo
24-07-2025
- Business
- Yahoo
JP Morgan and Rothschild top M&A financial advisers for H1 2025
JP Morgan has emerged as leading financial adviser in terms of deal value within the power sector for the first half (H1) of 2025, while Rothschild has topped by volume, based on the latest financial advisers league table by GlobalData, a leading data and analytics company. The insight from GlobalData's deals database analysis revealed that JP Morgan advised on deals worth $44bn, securing its position at the top by value. Rothschild took the lead in volume by advising on a total of ten transactions. GlobalData lead analyst Aurojyoti Bose comments: 'Rothschild & Co was the top adviser by volume in H1 2024 and managed to retain its leadership position by this metric in H1 2025 as well. 'Meanwhile, there was an improvement in JP Morgan's ranking by value from the second position in H1 2024 to the top spot in H1 2025. This was due to involvement in big-ticket deals, which resulted in a massive jump in terms of value. During H1 2025, JP Morgan advised on five billion-dollar deals that also include three mega deals valued more than $10 billion.' Despite topping by value, JP Morgan also claimed second place by volume with nine deals. They were closely followed by Evercore, Lazard and Carnegie, each having seven deals. In terms of deal value rankings after JP Morgan, Evercore stood second with advisories worth $33.5bn. Goldman Sachs followed closely with $31.4bn, slightly above Morgan Stanley with $31.2bn, and next came Lazard with advisories amounting to $30.4bn. "JP Morgan and Rothschild top M&A financial advisers for H1 2025" was originally created and published by Power Technology, a GlobalData owned brand.
Yahoo
23-07-2025
- Business
- Yahoo
JP Morgan tops retail M&A financial advisory rankings in H1 2025
JP Morgan has secured the top spot as the leading mergers and acquisitions (M&A) financial adviser in the retail sector, based on both value and volume, in the first half (H1) of 2025. GlobalData, which is the parent of Retail Insight Network, ranked advisers by the value and volume of M&A deals on which they advised. JP Morgan achieved the highest rank for deal value, having advised on six transactions totalling $42.3bn in H1 2025. GlobalData lead analyst Aurojyoti Bose stated: 'For JP Morgan, there was an improvement in the total volume and value of deals advised by it in H1 2025 compared to H1 2024. However, the improvement was very prominent in terms of value, as all six deals advised by it during H1 2025 were billion-dollar deals. 'Among these deals, JP Morgan's involvement in the $23.7bn deal for acquisition of Walgreens Boots Alliance by Sycamore Partners was pivotal for it in securing the top spot by value.' Goldman Sachs followed JP Morgan in terms of deal value, advising on transactions worth a total of $30bn. Citi followed closely at $29.2bn, while UBS and Wells Fargo advised on deals valued at $28bn and $26.3bn, respectively. In terms of deal volume, UBS secured second position with six deals. Bank of America, Rothschild & Co and Ernst & Young each advised on four deals, securing their positions among the top financial advisers for retail sector M&A in H1 2025. GlobalData's league tables are based on the real-time tracking of thousands of company websites, advisory company websites and other reliable sources available on the secondary domain. A dedicated team of analysts monitors all these sources to gather in-depth details for each deal, including adviser names. To ensure further robustness to the data, the company also seeks submissions of deals from leading advisers. "JP Morgan tops retail M&A financial advisory rankings in H1 2025" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-07-2025
- Business
- Yahoo
Goldman Sachs leads M&A financial adviser rankings for construction in H1 2025
Goldman Sachs has emerged as the leading financial adviser in the construction sector for mergers and acquisitions (M&As) in terms of value during the first half (H1) of 2025, according to the latest league table published by leading data and analytics company GlobalData. Goldman Sachs secured the top spot by deal value, advising on transactions worth $26.2bn. In contrast, Jefferies led by deal volume, having advised on nine separate deals. GlobalData's Deals Database further highlights J.P. Morgan as the second-ranking adviser by deal value, with $22.2bn worth of deals. GlobalData lead analyst Aurojyoti Bose said: 'Both Goldman Sachs and Jefferies witnessed improvement in value and volume of deals advised by them in H1 2025 compared to H1 2024, and their respective rankings by these metrics also improved. 'Jefferies went ahead from occupying the 11th position by volume in H1 2024 to top the chart in H1 2025. Similarly, Goldman Sachs' ranking by value also improved from the fourth position in H1 2024 to the top position in H1 2025. 'It is noteworthy that all the six deals advised by Goldman Sachs during H1 2025 were billion-dollar deals, which also included a megadeal valued [at] more than $10bn.' Jefferies followed closely with $19.2bn while Citi and Bank of America advised on deals valued at $18.1bn and $17.9bn, respectively. In terms of deal volume, Lazard ranked second, advising on eight deals, matching Houlihan Lokey's tally. J.P. Morgan and Citi both advised on seven deals each, rounding out the top advisers by volume. GlobalData's league tables are based on the real-time tracking of thousands of company websites, advisory company websites, and other reliable sources available on the secondary domain. A dedicated team of analysts monitors all these sources to gather in-depth details for each deal, including adviser names. To ensure further robustness of the data, the company also seeks submissions of deals from leading advisers. "Goldman Sachs leads M&A financial adviser rankings for construction in H1 2025" was originally created and published by World Construction Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
