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Empowering Families: An Early Path to Retirement Savings

The federal government often stands as an obstacle to investing for retirement, hindering or preventing the saving and investment strategies needed to secure retirement income. Retirement saving becomes more complicated due to tax laws that limit early investments. The primary issue with these restrictions is the lost opportunity for compound interest.

Every financial advisor will tell you that the earlier you start saving for retirement, the better off you are. Time is king. The longer your investments have to earn, the more you will accumulate.

My administration will prioritize enabling early investments. The choice of investments will be completely yours, and parents will have full authority over where their young children's funds are invested. It will be the responsibility of the parents to make these investments.

Every child should have a retirement account from the day they are conceived. Although the federal government allows a child to have an IRA at any age, as long as they have a Social Security number, conception does not qualify for saving according to federal rules. This restriction blocks nine months of growth, a seemingly small amount that can translate to tens of thousands of dollars by retirement age.

Besides the nine-month gap, another issue is the discomfort that most parents probably feel when starting their child's Roth IRA. Since a child can only contribute an amount equal to their earnings in a single year, and very few children under 15 or 16 earn substantial income, this leads to further delay in retirement investments—this time, 16 years.

If nine months can mean thousands of dollars' difference at retirement age, then a 16-year delay can mean many hundreds of thousands.

Parents might be tempted to overlook the law and fund their child's Roth IRA with a reasonable amount. The annual limit is $6,000, and if they are willing to bend the rules, they might fund the account with a sum in the low thousands. "Surely the IRS won't bother us if we don't push the limit," they may reason. The thought of a 4-year-old earning $6,000 seems implausible. But if parents were able to do so, wouldn't they be delighted to fund their child's account to this amount, regardless of whether the child had earned any money at all?

My administration will prioritize enabling tax-free retirement saving and investing. Whether parents can contribute $10 or $10,000 per year to their child’s financial well-being, the federal government should not be an obstacle. My administration will neither direct your investments, provide money for you to invest, promote specific investments, nor exert any dictatorial force or persuasion to influence your investment choices. We will simply empower you to direct your life and raise your children as you see fit. My administration is committed to protecting you from others who might seek to make those decisions for you.

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