Saturday night, September 6, 2025, is a date that will long be remembered by two Powerball ticket holders, one in Missouri and the other in Texas. The prize they will split (sorry, winners, you will have to share) is estimated at nearly $1.8 billion (that’s 1,800 Millions of Dollars). After my initial disappointment that there were no Florida winners, my concerns fell to the winners’ situations.
Having spent 2+ decades as a professional financial advisor, I have learned firsthand about errors made, and dreams shattered, among people experiencing “Sudden Wealth.” While only one example of Sudden Wealth (inheritance is another), today we are talking about lottery winners. Over the years, we have had several direct experiences with Sudden Wealth (not our own), through our financial advisory business. Contact with Sudden Wealth presents a learning experience, one which I hope the new winners get educated very quickly.
Among non-winning lottery ticket purchasers, the worst cases we see (and hear about) are in a group that spends their working years “planning for a windfall” by purchasing lottery tickets. These people “know” that eventually their numbers will be the right ones, and a cushy retirement awaits. They are, of course, wrong, eventually becoming old, broke, and miserable.
Having had the unusual good fortune of getting involved with winners of staggering lottery prizes and substantial inheritances, I must also report that money can buy happiness, at least for the right people. The secret lies in planning for the windfall, once notification of its imminent arrival is received.
This may sound strange to some people, but the last action when becoming a large lottery winner should be making any public announcement. Media people will discover and divulge names and locations; you won’t have to do anything except stay quiet, while immediately finding and procuring yourself a safe environment. This satisfies the highest priority for winners – personal safety.
Second in priority (but also critical) is the security of the actual money. With each of Saturday’s winners expecting a pre-tax windfall of about $410 million (assuming they select the lump sum option), they need a plan for custody of funds with maximum security and insured coverage. Federal Income Tax owed by each will be in the 37% bracket, or about $152 million, but only 25% will be withheld. The balance is owed as of the next April 15, and must be preserved.
Finding a personal “Dream Team” of advisors is a necessity for any substantial Sudden Wealth recipients. We recommend starting with a qualified Certified Financial Plannerâ, operating as a fee-only Registered Investment Advisory, or RIA. Add a trusted attorney and CPA, and you have a good start.
Planning on sudden wealth, whether through gambling or inheritance, is never an acceptable retirement plan. But not planning for the windfall, once notified of its pending arrival, is equally dangerous.
Starting life with a little financial “nudge” would benefit nearly everyone, and for now anyway, that is about to happen. Part of the One Big Beautiful Bill Act (OBBBA) of 2025 is a provision for newborns in 2025 through 2028 to receive a $1,000 “gift” deposit from the Government into “Trump Accounts.” Those funds are required to be invested in U.S. Equities, and account assets cannot be touched before the owner turns 18. So far, so good, but remember that the actual gifts are from all of us who pay taxes.
As usual in dealings with the Government, there are layers of complexities that have not been broadcast in the media. Many optional provisions are available for people who have the desire (and the means) to hand their children a more substantial “head start.” Where complexity exists, analysis is needed to optimize intended results. We can’t cover everything in one Blog, but we’ll address some highlights everyone should know.
Including one-time Government Contribution for Newborns (these only apply to citizens with Social Security Numbers), there are two optional forms of contributions. Private Contributions can be made by anyone, prior to the year of the child’s 18th birthday. No contributions are tax-deductible, and total annual (non-government) contributions cannot exceed $5,000.
A third Trump Account deposit type is dubbed Employer Contributions, which are limited to $2,500, although there remain grey areas as to the restrictions on these contributions. At this point, Employer Contributions are included in the $5,000 annual limit, but this may change in the final regs.
Until the account owner turns 18, the account is treated as a type of Traditional IRA, but with totally separate rules. Upon reaching 18, the Trump Account becomes a Traditional IRA, subject to regular rules. Notably, this includes the ability to convert the Trump Account to a Roth IRA, which is likely to become one of the most important considerations for people considering making contributions.
Although the Newborn Contribution applies to all babies born on or after January 1, 2025, Trump Accounts will not be funded until at least July 1, 2026. This waiting period will allow final regulations to become part of the U.S. Tax Code, and paperwork to be made available for program operation.
Many other available forms of financial assistance by parents and relatives to assist minor children must be considered when allocating scarce dollars. Universal Transfer to Minors Accounts (UTMAs), 529 College Savings Accounts, and other IRAs should be considered in the mix. Competent financial advisors will need to understand the options.
Pretty much everyone pooh-poohed President Trump 47 for openly and tirelessly supporting passage of his wide-ranging tax proposal dubbed One Big Beautiful Bill (OBBB). Washington “insiders” know that things are just not done that way in D.C., preferring an incremental approach. For the most part, the insiders are right. Far-reaching tax legislation is seldom popular among taxpayers, likely because experience has made us all suspicious. But with Trump, usual and customary is not the flavor of the month.
OBBB slowly became both acronym and legislation for Trump’s second major Tax Code overhaul. Against strong political headwinds, OBBB passed and was signed into law on Trump’s original target date of July 4, 2025. Immediately, Trump’s political opponents dove headfirst into their thematic resistance, using a disinformation campaign of epic proportions. Their rallying cry was (again), “Tax cuts for millionaires and billionaires.” As usual, the legacy media was quick to oppose Trump, endlessly parroting the false depiction.
Under OBBBA (“A” stands for “Act”), a vast majority of taxpayers are better off financially. NOT by just a little, and the only losers are some uber-high-income Americans.
Far from providing “tax cuts for the rich,” OBBBA prevented scheduled tax increases on everyone. The Tax Cuts and Jobs Act of 2017 (TCJA) temporarily (Tax Years 2018 through 2025) provided tax cuts for most Americans, but the Act was set to expire on January 1, 2026. OBBBA made those tax reductions permanent, saving average American families approximately $2,900 annually.
Additionally, OBBBA cut taxes even further for most Americans, and some of these cuts are retroactive to January 1, 2025. Most notable are provisions called No Tax on Tips and No Tax on Overtime. These provisions were Trump campaign promises, and are now the law of the land, except for America’s highest-income taxpayers. Only Lower-income and Middle-income Americans reap the benefits from these provisions.
Throughout history, “Big Lies” have been propagated by politicians and by the complicit legacy media. Media coverage of OBBBA is a classic example of this “unholy alliance.” OBBBA should be revered, rather than reviled.
Overall tax savings for an average American household with 2 children are estimated to be $7,400 per household, each and every year of the Trump 47 Administration. Shameless are the political and media forces obstructing this information from the general public. The Truth will change public opinion.
It is time to stop the lies, embrace good news, and pocket our savings.
Right up front: we don’t purchase and/or hold Cryptocurrency or “crypto” in client accounts at Strivus Wealth Management. Some of our clients do hold crypto, but they do not own any crypto in accounts under our management. The “why” is very simple. Our business involves assisting clients in the accumulation of long-term wealth, with a level of risk appropriate to that mission, and within our clients’ personal tolerances. Slow and steady growth over time creates winners.
Creating portfolios within the rules and regulations of the U.S. Securities and Exchange Commission (SEC) requires transparency. We caution all investors to understand every asset in their portfolios, and to be able to view them at any time, using a well-known, independent, third-party website. This requires the utilization of publicly traded securities, all held at large custodial firms, such as Schwab, Fidelity, and others, where asset prices are listed at all times.
Investors seeking a faster (more “exciting”) path to wealth are feeling encouraged by a recent Trump Administration announcement that the rules are about to be loosened, allowing purchase of certain previously-unallowed Alternative Investments (Alts) within 401(k) Accounts (and similar Plans at other employer types). The most well-known Alt investment these days is Cryptocurrency, or simply crypto. Crypto hype is everywhere, but crypto understanding is sadly lacking.
Employer-sponsored Retirement Plans are regulated by ERISA, the Employee Retirement Income Security Act of 1974. The law has been amended several times over the years, but its purpose remains the same – to protect employees’ retirement funds through adherence to strict standards of conduct and regulation. ERISA established a fiduciary standard for anyone involved in any significant role with 401(k) Plan Administration and Investing. This strict standard requires execution of Plan-related duties in a manner the law describes as a “prudent man standard.”
Crypto is inherently riskier than publicly traded securities and is not even classified as a security. Instead, crypto is considered property by the IRS, and Capital Gains Taxes are paid on (net) profits made by trading (buying and selling) crypto shares, or “coins.”
Until such time as crypto is accepted as legal tender under the law for all debts, public and private, I believe that it has no place in traditional Retirement Accounts. Investors should be able to invest in what makes them happy, but our interests lie in long-term success.
Count me out for crypto, at least for now. Changes are certainly on the horizon, but caution reigns supreme when the stakes are high.
Great news, America! Uncle Sam maintains a website (pay.gov) where taxpayers may voluntarily contribute funds, above their actual income tax obligations, ostensibly to reduce the national debt. And to make it easier for you, they now take PayPal and Venmo. How considerate.
Making a recommendation on something I haven’t yet seen would be unprofessional, so I opened a browser tab, put the address in, and went to the site. Then I skimmed down to find the link to make donations. From there, I found the donation tab for reducing the National Debt.
According to my iPhone’s timer, my search lasted about 30 seconds, simply to get to the page where the forms are available. From finbold.com, I learned that our government over-spends its revenue (read: borrows dollars) at the rate of $62,000 per second, or $1,860,000 during my search. Had I intended to contribute, those figures would have burst my patriotic balloon. A government that overspends at that pace has no respect for its hard-working taxpayers. In return, that government gets no claim on my “extra” dollars, should I have any.
Since 1996, Americans have voluntarily ponied up about $67,300,000 to “reduce the national debt.” The government overspends that much money in 1,086 seconds, or about 18 minutes. In that context, voluntarily paying extra dollars represents an act of futility, rather than one of loyalty. In my opinion, it is money gone forever from us, unrecognized by our entire country’s taxpayers and creditors.
As a professional financial advisor and radio show host, I help clients, readers, and listeners reduce their annual tax liability through careful planning. We live in an expensive era, one in which saving dollars is a high priority. Whenever tax rules can assist our savings, we all benefit. However, most politicians do not see the world the same way we do, and are constantly trying to squeeze us, the taxpaying loyalists, for more revenue. Their time would be better applied reducing spending and slowing the growth of the National Debt.
Voluntarily paying “extra” dollars on top of already burdensome taxes and winding up with nothing to show for our generosity, has absolutely no appeal to me. Based on the paltry donations to the website over nearly 30 years, I believe that I am part of the American majority. The fruitless nature of trying to reduce a debt that increases faster than we could all donate to pay it off is patently obvious.
Don’t be fooled. When Congress presents us with a balanced annual budget, we’ll take another look. Until then, pay.gov will not see my search engine’s footprint any time soon. Plus, think of the time I am saving by not creating a PayPal or Venmo account.
Inflation in medicine generally outpaces most other price indices, and 2026 is looking to be no exception. Last week we highlighted the deleterious effect Medicare increases have on Social Security monthly benefit Cost of Living (COLA) increases. In a year of elevated medical inflation, many Social Security recipients find that they will receive no net increase in monthly benefit payment, losing the entire COLA increase to monthly Medicare cost escalation.
We are fortunate in one respect, as the “hold harmless” provision in Social Security prevents net monthly benefits from decreasing. When any monthly retirement benefit increase is smaller than the corresponding Medicare cost increase, Social Security is not allowed to pass along the entire Medicare increase. Rather, it is held in abeyance for future years, and can be applied in a year when the benefit increase would otherwise be positive.
When this condition arises, Social Security is allowed to pick up some or all “suspended” increase(s) from prior years. Again, “hold harmless” restrains application of past unapplied increases at the level where nominal Social Security monthly benefit would otherwise go negative. This process is continued until the entire “suspended” Medicare increase has been eradicated.
Social Security recipients who are also enrolled in Medicare are subject to higher Medicare premiums if their incomes are above a certain threshold. Costs in excess of the Medicare base rate are dubbed IRMAA, for Additional Income-Related Monthly Adjustment Amounts. There are 5 levels of IRMAA surcharges, with the maximum being charged to Medicare recipients earning above $500k for Singles, or $750k for Married Filing Jointly. Recipients whose income puts them in higher IRMAA brackets are not protected by the “hold harmless” clause, and their benefit payments will be reduced by IRMAA.
Like income tax brackets, IRMAA brackets are adjusted for inflation. However, at this writing, Medicare is estimating that IRMAA brackets will be adjusted by only about 1.04% in 2026, supposedly based on the Consumer Price Index for all urban consumers (CPI-U). Our same government, using the same Index, but apparently not the same calculation, is estimating that our current 12-month inflation rate is 2.7%. This system is detrimental to America’s seniors.
Inflation reduces the purchasing power of every American dollar, whether earned in the past or in the current pay period. An unchanged monthly payment, whether from work or from a job, buys less than it bought last month, or in any past month. Over time, inflation erodes our lifestyles. Seniors, especially those on fixed income, are punished for a situation they cannot control.
Inflation has been tamed, although not quite all the way to the 2.0% annual target set by Federal Reserve (FED) Chairman Powell. Concurrently, government is approaching the September 30 end of Fiscal Year 2025. Now is the season when various prognosticators are busy estimating Cost of Living Adjustments (COLAs) for various and sundry programs administered at the Federal level.
For years, I have argued that there should be one, and only one, annual rate of inflation, with consequent COLAs. My pleas consistently fall on deaf ears, and varying COLAs continue to be applied by Congress, the IRS, Medicare, and various operating departments and agencies. Somehow, taxpayers seem to get shorted in the process, and next year is shaping up to be no exception.
Social Security and Medicare are irrevocably intertwined, as Social Security recipients have their Medicare Part B (and Part D, if applicable) premiums deducted from monthly benefit payments. COLA estimates for 2026 are looking minimal, beginning with an estimated 2.7% increase in Social Security monthly benefits. Today’s average Social Security payment is $2,002.39. Applying a 2.7% COLA would increase the average benefit to $2,056.45, an increase of $54.06.
Medicare cost projections have raced ahead of the reported 2.7% inflation rate, and are estimated to increase by 11.6% for 2026. From the current Part B monthly premium of $185.00, an 11.6% increase would add $21.46, arriving at a monthly cost of $206.46. The Net result for an average Social Security recipient would be a monthly increase of only $32.60, or 2.0%. Once again, we Senior Citizens (appear to) get slighted, incrementally reducing our purchasing power.
For lower-income Americans, whose Social Security Benefit payments are closer to $1,000/month, the Medicare Part B monthly premium adjustment is the same number of dollars ($21.46). However, the economic impact is far greater for these people, and the net loss to them is irreplaceable. But it doesn’t end there. For enrollees in the Medicare Part D Drug Plan, the estimated cost increase is 6%, again much higher than the 2.7% anticipated benefit increase. We lose again.
Wait, we’re not done yet. How about throwing at us another $100/year in out-of-pocket deductible costs, applied before any Medicare coverages kicks in? Somehow, that extra expenditure evades news purveyors, both in government and media. Quietly, it increases Americans’ costs and reduces our lifestyles.
“One step forward, two steps back” comes to mind. In the modern era of communications, lies abound, and none are so egregious as Lies of Omission. What we are not told far outweighs that which we hear about daily. The economic squeeze Americans have been experiencing for decades continues to erode our living standards. How can we reverse that?
Next week, we’ll tackle IRMAA adjustments, and it doesn’t get better.
Washington, D.C. has a penchant for “slick” names on legislation. Names frequently get initiated with acronyms ostensibly descriptive of actual legislative purpose (reality notwithstanding). One recent example is the S.E.C.U.R.E. Act, which was assigned the moniker Setting Every Community Up for Retirement Enhancement, an uncomfortable sequence of words at best.
This year, the acronym version of the Trump Tax Plan began with the vision of the President, and the acronym came later. Once the concept of doing a massive overhaul to the Tax Code in “One Big Beautiful Bill” was expressed, very little time passed before the OBBB moniker was ubiquitous. Once the presidential signature activated the changes, OBBB became the One Big Beautiful Bill Act (OBBBA), meaning that it is the law of the land.
Because most Americans are woefully ignorant of Tax Code details, we have been explaining several important provisions of OBBBA. The so-called “headliner” provisions pertain to actual tax rates and brackets, which needed to be made permanent. Failure of OBBBA would have imposed America’s largest ever tax increase on American taxpayers.
Everyone is affected by these and other provisions, some of which are receiving very little attention. Today, we begin with changes to Health Savings Accounts, or HSAs. Covered services have been expanded, primarily in the telehealth and cost-sharing arenas. Avoiding hospital visits was a goal during COVID-19, and many of the conveniences from that era are now HSA available.
Several business-friendly provisions will help everyday Americans by reducing inflationary pressures. Reducing the cost of doing business in the US allows companies to reduce prices, providing relief for families. Full expensing of Research and Experimentation has been restored, thereby encouraging companies to perform these scientific functions domestically. In all likelihood, the results of these efforts will create thousands of American manufacturing jobs.
Paid Family and Medical Leave tax credits created under the Tax Cuts and Jobs Act of 2017 (TCJA) were made permanent. Employer-paid Child Care Credit was expanded and made permanent. Gift Tax and Estate Tax limits, made higher by TCJA, have been made permanent.
OBBBA is a gigantic and far-reaching modification to our massive U.S. Tax Code. In its reported 940 pages, we can find something for everyone. Yet the biggest change (for most people, anyway) was what didn’t happen. In the absence of OBBBA, Americans were scheduled to be hit with a 2026 tax increase in the thousands of dollars annually. Despite the lack of any cooperation from Trump’s opposition, the job got done.
As further provisions get finalized and published, we will cover further topics of interest.
Many said it couldn’t be done, and others (including me) were merely skeptical to some degree. Back in January 2025, President Trump 47 indicated to House Speaker Mike Johnson that he did not want to partition Trump’s tax plan into several components. That created a bit of an uproar in Washington, D.C., as that is “NOT THE WAY WE’VE ALWAYS DONE IT.”
What I, and many others, didn’t give enough credit, was the political and practical power of Trump. Through pure force of will, he gathered support in Congress, and across the country, for creating One Big Beautiful Bill, and skeptics everywhere pooh-poohed his chances of success.
Fittingly, on Independence Day, we kicked off a year of counting down to our nation’s 250th year of Independence, with the signing of One Big Beautiful Bill (OBBB) into the One Big Beautiful Law (OBBL). The ceremony was not without fanfare, I might add. You know — Trump Style! Now that the ink has dried, I am 86ing the term OBBB, in favor of OBBL.
Reportedly comprised of 940 pages, OBBL will impact virtually every American. We will begin by explaining some key provisions we believe will have the largest impact on readers, listeners, clients, and friends.
Tax Rates and Brackets. The Tax Cuts and Jobs Act of 2017 (TCJA) reduced Individual Income Tax Rates, while simultaneously widening Individual Income Tax Brackets. In combination, these items assured a vast majority of Americans receive a substantial tax cut (for 8 years). As of the OBBL, those tax reduction provisions have been codified and made permanent.
Standard Deduction. For all taxpayers, the Standard Deduction, which doubled in TCJA, has increased an additional 10%, for each of the 4 years of the Trump 47 Presidency. Larger Cost of Living Adjustments (COLAs) make it even better for taxpayers in the lowest three Tax Brackets.
Child Tax Credits. For 40 million Americans with children, the Child Tax Credit was increased to $2,200, made permanent, and inflation indexed.
No Tax on Tips. Millions of Americans in jobs that rely on Tip Income will pay no Income Tax on up to $25,000 of Tip Income annually.
No Tax on Overtime. For approximately 80 million Americans, up to $12,500 of annual overtime pay is no longer subject to Federal Income Tax.
Charitable Deduction Improvement. A new, above-the-line deduction for Charitable Contributions up to $1,000 person, or $2,000 per couple, allows everyone to reduce taxable income for donations to their favorite charities.
By far, OBBL’s most important provision is the permanent codification of tax provisions from TCJA that were set to expire on December 31, 2025, resulting in a record-breaking tax increase on Americans. In coming weeks, we will report on further provisions that affect great numbers of American taxpayers.
The IRS requires adherence to very specific rules for family employment, and failure to abide by those rules can be costly. On the theoretical side, there is no age limit for a child to be hired by his or her parents’ business. But since the compensation has to reflect actual duties being performed, there are practical limits regarding the age of the child. Only in the most unusual and specific circumstances can children under 14 actually earn income.
As with every aspect of dealing with the leviathan U.S. Tax Code, pitfalls abound, and failure to properly address the rules can bring trouble. We don’t profess to know and understand every detail, as we are not Tax Preparers, CPAs, or Attorneys. However, as Certified Financial Planners®, we are qualified to offer Tax Planning recommendations for you to discuss with your tax professional.
Today’s discussion is limited to personal businesses, owned solely by one or two parents of the child. These entities present specific opportunities for tax-saving employment of young family members, but caution is required to adhere to State and Federal laws and regulations.
Employing your children requires treating them as actual employees. Whatever payroll system is used in your business, your kids need to be enrolled as employees. Critical to success is specifying duties that are applicable to your business, as well as appropriate for young workers.
IRS has specific rules for taxation of family members under 18. Rules can be utilized to increase your business profits, while simultaneously offering the kids valuable experience. Taxation varies according to age, and must be understood by the parents before making any arrangements.
Children under age 14 cannot work any hours, except for occasional exceptions, such as babysitting and newspaper delivery.
Children ages 15 and 16 can be employed, but have strict limits on hours per day or week, and whether school is in session. These rules are published by the IRS, and are further restricted in some States.
Once reaching age 16, but before age 18, children may work unlimited hours, but are expressly banned from certain “hazardous jobs,” as defined by the IRS.
Wages paid to children of a business owner reduce the owner’s taxable income. Each child becomes a taxpayer with a Standard Deduction of $15,000, paying no Federal Income Tax up to that amount. Note that IRS does not require parents to withhold payroll taxes for their children under 18.
Taking advantage of opportunities presented with self-employment by hiring your own children is not without potential pitfalls. Anyone contemplating hiring a child should thoroughly research state and Federal rules. Americans of every age would be better off learning more about the Tax Code.