Happy Sunday! Here’s what we’re covering in today’s Clark Smart Investing newsletter:
The investing lesson hidden inside Trump Accounts
How the widow’s penalty works — and how to plan around it
Should you give your kids their inheritance while you’re still alive?
Q&A with Wes Moss: Does a larger balance in a single index fund compound faster than the same total amount split across multiple funds?
💵 The Biggest Investing Lesson From Trump Accounts
Trump Accounts opened for business on July 4. Babies born between 2025 and 2028 can get $1,000 from the federal government, which can be invested in a low-cost S&P 500 index fund, and the money will grow until adulthood.
You can debate the merits of the accounts themselves. Money expert Clark Howard already has. His advice is simple: “Take the free money.” But he recommends against adding your own contributions because he believes there are other places you can put that money that offer greater tax advantages.
Politics aside, Trump Accounts give millions of American children the one investing advantage no adult can ever buy back: time.
That head start is the lesson everyone should take from Trump accounts. Let’s look at the math.
How does a one-time $1,000 investment turn into nearly $600,000 by retirement? Regardless of politics, the rollout of new "Trump Accounts" for children provides a powerful reminder about the undeniable math of compound interest. Here is what the numbers look like if you start investing at age zero—and what it teaches all of us about building wealth, no matter our age. Read the breakdown in the full article.
📚 Recommended Reading
Losing a spouse is heartbreaking, but many retirees are blindsided by a secondary blow: a massive spike in their tax bill. The good news? You can plan for it ahead of time. Here is how the rules work and the smart financial moves couples should make now to protect each other later. Read more.
Why wait until you’re gone to pass down your hard-earned savings? More and more retirees are choosing to give their kids their inheritance while they're still alive to watch them buy a first home, fund an education, or hit major milestones. It can be incredibly rewarding—but only if you follow one golden rule. Before you write any checks, here is the retirement math you need to run first, plus the tax pitfalls you’ll want to avoid. Read more.
Sponsor
Converting retirement savings to a Roth IRA may help reduce future taxes, but understanding the trade-offs is essential. Read the free guide for a straightforward look at how Roth conversions work and when they may be worth considering.
💬 Ask an Advisor
✅ Poll: What’s Your Take?
Every week, we'll ask a new question to get your take on the latest financial trends and topics.
Last Week’s Poll Results
We asked: “Have you ever spent a large amount of money on a multi-generational family vacation?” Here’s how you answered:
Yes, and it was worth every penny! - (35%)
Yes, but looking back, it wasn't worth the financial stress. - (3%)
No, we stick to smaller, budget-friendly trips. - (45%)
No, but I’m currently saving up for one. - (7%)
No, but I've been on one. - (10%)
💸 Money Tip of the Week
Delete your credit card info from one retailer: Leaving your credit card info saved on retail websites makes you a prime target for the next inevitable corporate data breach. Take control of your digital safety today by logging into just one favorite online store and deleting your stored payment details. You’ll protect your wallet from hackers and build a natural speed bump against impulsive spending.
☎ Need Money Help?
The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information.
This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Any company names shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
