We are getting a lot of questions about Trump Accounts, and I am enjoying the conversations. Last week, a client forwarded me a message they had received from a friend stating: “If you put a meager $25 into that account (Trump Account) until the age of 60… earning only 10% annually, it would be worth $1.26 MILLION by then. INSANITY. You’re a millionaire at age 60 by putting only $25 a month away. You’re welcome. Thank the Dell Family if you have a newborn with one of those accounts.” “Got this from a friend. What do you think?” asked the client. While we can only hope that 10% returns are achievable (it’s a long-term historical average, we have some doubts that future returns will be as high, real returns swing a lot from year to year, and nothing is guaranteed), it was great to have a conversation and remind her that this is how compounding works! The author likely used 10% because that is the amount that is attributed to historical U.S. stock returns. Two quick clarifications to the message, though: To get to $1.27 million, the example is also including a starting value of $1,000 and most of the proceeds would be taxable when it comes out (more on that below), and the Dell family’s $250 is for older kids, not newborns. Newborns get $1,000 from the federal government instead. But I also reminded her that stock investing isn’t limited to Trump Accounts, and there is a range of other tools available too. Here is when you should absolutely consider a Trump Account and some other accounts you should also consider for your kiddos: When to say yes If you had a child or will have a child between Jan. 1, 2025, and Dec. 31, 2028, your child is eligible to receive $1,000 to get started, as long as they are a U.S. citizen with a Social Security number. Treasury automatically opened Trump Accounts for eligible kids on October 1, 2026, but the $1,000 is not automatic. You still need to claim the account and fill out IRS Form 4547 ( irs.gov/trumpaccounts ), which you can do in the Trump Accounts app, through your IRS online account, or with your tax return. It costs nothing to claim, and it requires no contribution to receive the $1,000. Other than this cohort, there are starting to be additional programs. See investamerica.org to find out if your child is eligible for the $250 Michael & Susan Dell program (generally kids born from 2016 through 2024 who live in a qualifying ZIP code). This seems to be becoming a trend, so keep your eyes open for additional programs like this . Some employers are also contributing to their employees’ kids’ accounts, so it’s worth checking with HR. When to consider other options Trump Accounts have some pretty specific rules. The easiest way to describe them is that they are like making non-deductible IRA contributions. What that means is that you can invest in a Trump Account, you get no tax deduction for doing so, the investment grows tax-deferred, and when the money is distributed in retirement, the gains and any of the “free money” used to fund the account are 100% taxable ordinary income. The money you put in comes back out tax-free, since you already paid tax on it. Contributions are capped at $5,000 per year (the $1,000 and charitable gifts like the Dell program don’t count toward that limit), and the money has to be invested in low-cost U.S. stock index funds. No money can come out until January 1 of the year the child turns 18. At that point, the account has the same rules as a traditional IRA, and additional contributions require the child to have earned income. Distributions prior to age 59.5 have a 10% early distribution penalty, unless an exception applies, such as qualified higher education expenses or up to $10,000 toward a first home. Depending on your situation, here are some other accounts that might work better: 529 education savings accounts – Many states (including Kansas and Missouri) offer state income tax deductions for contributing, the funds grow tax-deferred, and the funds distribute completely tax-free if they are used for qualified expenses. UTMA accounts – These don’t have tax deductions or tax-deferred growth, but they can be more flexible if the goal is to spend on things such as weddings, cars, and down payments. Just know that the money legally belongs to your child, and they take full control of it at age 21 in both Kansas and Missouri. Minor Roth IRA – These aren’t accessible to everyone, but if your minor child has earned income, either from a part-time job or real work for a small business that you own (at a reasonable wage), they can be a great option. How to access and invest the account If your child is eligible, they likely already have a Trump Account, since Treasury opened one for every eligible kid on October 1, 2026. Download the official Trump Accounts app (or visit trumpaccounts.gov) to claim and activate it. You need to claim the account before you can manage it or let family and employers contribute. Once claimed, the account is held at Robinhood, the government’s initial trustee. The money has to be invested in low-cost U.S. stock index funds, so you won’t be picking individual stocks. Down the road, other custodians will likely be available, and you should be able to move the account to other firms, but that option isn’t available yet. Any move must be a direct transfer of the whole account, and each child can only have one Trump Account at a time. Trump Accounts can be a great tool, especially when there’s free money involved, but they aren’t the only one.
Social Security is a big piece of most of our clients’ retirement plans, but too often, too little time is spent trying to optimize their Social Security outcome. We cannot stress enough that everyone’s situation is different and that no one should be making a decision based on what their neighbor did or didn’t do. Although there are certainly situations where taking Social Security early can make sense, one of the biggest hurdles we run into while planning is people’s fear that Social Security is going to be gone by the time they are done with retirement. J.P. Morgan Asset Management included this infographic in their latest Guide to Retirement, and we’ve recreated its two charts below. What it shows is something most people haven’t been told: even after the trust fund is projected to run out in 2032, ongoing payroll taxes would still cover about 78% of scheduled benefits.1 Today, the trust fund is what picks up the shortfall. Hypothetically, even if Congress does nothing, most Social Security benefits would still be covered by payroll taxes through the year 2100 (about 62% by then, based on the Trustees’ projections).
Most investors have followed the extraordinary share-price gains of Nvidia and other beneficiaries of the AI boom, so enthusiasm for the industry is understandable. But will shareholder returns from here match the excitement, and how much of the anticipated growth is already reflected in today’s valuations? The technology is transformational. Demand for compute is real and growing. And the productivity improvements are tangible. Nevertheless, investing in a theme hasn’t always been a sound strategy. Gus and I are wired cautiously, which tends to make us skeptics and contrarians (sometimes to my wife’s dismay). The capital committed to AI infrastructure has been eye-popping: Goldman Sachs estimates that global AI-related investment will exceed $1 trillion in 2026 alone. 1 Suppliers to this buildout have benefited accordingly. But how long can this level of spending continue? History suggests skepticism isn’t unfounded: past buildouts of transformational technologies have often ended in overinvestment. After the internet boom, an estimated 95% of installed fiber sat unused in 2001, 2 and excess capacity persisted for years. In the 1880s, U.S. railroad mileage increased about 75%, 3 and by 1894 roughly a quarter of it was in receivership. 4 In 1909, there were 272 U.S. automobile manufacturers, but by 1941 only nine remained. 5 Railroads transformed commerce, automobiles transportation, and the internet communication, while fracking revolutionized American energy production. Yet in each case, considerable economic value accrued to consumers or users of the technology, but that value did not always translate into attractive returns for the investors footing the bill. 6 The excess fiber laid during the internet buildout, for example, helped drive wholesale bandwidth prices down more than 95% between 1998 and 2007, 7 providing cheap “plumbing” that allowed companies like YouTube and Netflix to flourish over the following decade. Consider Cisco, a leading supplier of internet-related hardware in the late 1990s. Following three years of roughly 44% annualized revenue growth, Cisco briefly became the world’s most valuable publicly traded company in March 2000, with a market capitalization of $555 billion, trading at more than 200 times earnings. Investors who purchased at its $80.06 high watched the stock decline nearly 90% by October 2002. Its share price didn’t regain that high until December 2025—nearly 26 years later. 8 The internet proved as transformative as investors anticipated, and Cisco remained a strong business. The problem was the price: investors had paid in advance for decades of success. Today’s AI buildout has important differences, and we could still be in the early-to-mid innings. Rising usage and new applications could create enough demand to justify much of today’s investment. And the largest infrastructure investors—Microsoft, Amazon, Alphabet, and Meta (the “hyperscalers”)—are among the most profitable businesses in the world, with robust balance sheets. Industry spending is also remarkably concentrated: the four hyperscalers alone plan to spend more than $700 billion on capital projects in 2026 (based on April 2026 guidance), 9 much of it on AI, and have largely funded the buildout with cash on hand and from operations. But that cushion is thinning. As the chart below shows, the four companies’ combined capital expenditures have risen from about half of operating income (EBIT) in 2015 to 106% for the twelve months ended June 2026. Meanwhile, their net cash fell from roughly 6.3 times annual capital spending in 2015 to 0.17 times—roughly two months’ worth. They can still borrow or issue shares, and increasingly are,10 but the numbers suggest today’s pace of spending may be difficult to sustain.
Whether you are in your 20s just starting out or ready to call it quits for good, everyone wants to know how much they need to retire, if they are on track, and how much they can expect to live on while in retirement. No matter your life stage, this infographic from J.P. Morgan is one of my favorite visual examples for understanding where you stand.
Something that Preston and I have discussed at length is our concern about current valuations across the stock market. Our greatest concern is high-priced U.S. growth stocks, though it is not confined to them. We are not alone in this. In a July 15, 2026, CNBC interview, Warren Buffett summed up the environment in ten words: “It’s tough to find values when everybody is preferring gambling.”[1] The ratio of total U.S. stock market capitalization to GDP — a measure Buffett himself popularized — now stands above 230%, within a few points of its all-time high.[2] In 2001, Buffett wrote that investors were playing with fire if that ratio approached 200%.[3] A different valuation measure tells a similar story: the Shiller CAPE ratio for the S&P 500 is approximately 41, a level reached only near the peak of the dot-com bubble.[4] Berkshire Hathaway's actions back up Buffett's words. After fourteen straight quarters as a net seller of stocks, the company ended March holding nearly $400 billion in cash — one of the largest corporate cash positions in American history.[5] I want to be careful here, because we are not calling for a market correction, and we view timing the market as a loser’s game. Buffett is not calling for one either (Berkshire turned net buyer of stocks in the second quarter of 2026). [5] High valuations are not a sell signal. They can persist for years, and waiting for a cheaper entry point can mean missing further gains. What elevated valuations do tell us is something more modest and more useful: the price you pay can influence the return you can reasonably expect. In our view, today’s prices leave very little cushion for disappointment. Most businesses growing at a normal rate are already priced as exceptional ones.
Planning for what we hope is a multi-decade retirement is something that deserves significant time and consideration. Here is where to start: Social Security Have a tailored Social Security plan for your retirement. An NBER study found that the median household headed by someone ages 45 to 62 gives up $182,370 in lifetime spending by not optimizing when they claim. For our clients, we use an analysis tool that requires your specific information and generates a plan tailored to you. Health Insurance Understanding the ins and outs of Medicare is vital. You need to consider all costs, not just the premiums, and ensure that you navigate the enrollment windows. Getting this wrong could lead to either unnecessary premiums or to lifelong penalties. However, retirement doesn’t always need to wait until Medicare starts. With some good financial planning and healthcare tax credits, an early retirement could be available. Investments Understand what you own and why. In most cases, we see that a moderate allocation between stocks and bonds is appropriate for pre-retirees and retirees. Which stocks and bonds you own is important. Ensure you have an advisor that can adequately explain the different types and which environments they make sense in. In the current environment we see a lot of growth-focused stock portfolios. Understand the risk inherent in growth stocks and consider value stocks, small-cap stocks, and international stocks too. Fees and Taxes These can erode your hard-earned wealth. Understand what your advisor costs, what the underlying securities cost, and if they are tax efficient. Financial products are not free. Annuities have fees, spreads, and commissions. Index funds have inefficiencies and expense ratios. Mutual funds can have 12b-1 fees and capital gains distributions. None of these are necessarily bad, but taxes and fees directly affect outcomes. Source: NBER Working Paper 30675 (2022) — https://doi.org/10.3386/w30675 Advisory services offered by Latticework Investment Management, LLC. The information above is for educational and informational purposes only and should not be considered personalized financial, investment, tax, or legal advice.