LIFE IS A VOYAGE
ARE YOU PREPARED?

Additional benefits include eligibility for all families with children under 18, enabling wealth accumulation without the earned income requirements of IRAs or Roth IRAs. These accounts are more flexible than 529 plans (which are limited to college expenses) or UTMA and UGMA accounts. For example, investing $5,000 annually for 18 years at a 7% (assumed) return would yield approximately $170,000. Upon turning 18, the account can also be converted to a Roth IRA, allowing tax-free withdrawals in retirement. If no further contributions are made (after the initial 18 years), and the account grows until age 60, it could exceed $4 million in value (assuming a 7% ROR).

While Section 530A accounts are not an immediate solution, they are a step in the right direction. Narrowing the wealth gap promotes economic growth through increased participation, investment, and consumption. It also contributes to stability, as excessive concentration of wealth can lead to unrest, crime, and corruption. Money may indeed buy happiness as it improves living conditions, reduces stress, and provides peace of mind. Besides, helping children become financially independent gets them off your payroll sooner. As the top 20% now account for roughly 60% of spending, should Atlas shrug, the economy could get hurt. Because the top 20% spend a small amount of their disposable income, it doesn’t take much to cause a quake.