317-398-9753
[email protected]
Your Business. Your Family. Our Priority.
A company owners’ potential for personal financial security usually depends on the success of the business. Our commitment and responsibility is to help keep your business running smoothly and to help achieve your personal financial goals. Whether you are a business or an individual, our specialized staff will provide you with assistance in all your tax, reporting, financial and business affairs.
We're proud members of:
Brammer & Yeend is an independently owned and operated member firm of CPA Connect, a companion association to CPAmerica International
Financial information and reporting should not be a diversion for business owners, instead, financial information should be accurate, available, and insightful. We leverage experience and technology to provide business owners with dynamic resources and management tools.
Our personal services are designed to help busy, successful families manage their finances and grow their wealth with confidence and peace of mind. We do this by working together with our business solutions, allowing us to partner with clients and coordinate business and personal planning in order to meet their most important goals.
We strive to provide excellent service and solutions that fit our client’s specific needs and are industry appropriate. Our experienced CPAs have worked with clients in a variety of industries and understand the intricacies of each and apply the best solution possible. Over the years we have serviced clients in industries including agribusiness, retail, construction, manufacturing, food & beverage and many more. Below are some of our industries where we have specialized experience and expertise.
Key Takeaways:
Missing a tax deadline can happen, and until recently, getting a tax penalty waived required contacting the IRS and formally requesting relief. Now, with the introduction of Automatic Exemption from Penalty (AEP), the IRS can automatically waive certain penalties for taxpayers with a good compliance record. Here’s what to know.
Since 2001, the IRS has offered penalty relief through its First Time Abate program. Under this program, taxpayers had to reach out to the IRS, explain their situation, and wait for their request to be approved and processed. The main issue with First Time Abate is that many taxpayers didn’t even know it existed.
The IRS aims to fix this with AEP. Instead of putting the burden on the taxpayer, the IRS checks your compliance history when you file your tax return and automatically determines whether you qualify. If you do, the penalty won’t show up on your account.
The defining qualification for penalty relief is a clean track record. If you’ve filed required returns and paid your taxes on time during the previous three years, you are likely eligible. For quarterly filers, the IRS generally reviews the previous 12 consecutive quarters.
AEP applies to three of the most common penalties: filing late, paying late, and missing a payroll deposit. Other penalties, like underreporting income, still need to go through the normal process. And a handful of specialized returns, including estate and gift tax filings, are also left out.
One of the biggest advantages of AEP is that taxpayers don’t need to fill out an application or call the IRS to claim the relief because the IRS reviews your eligibility when processing your return.
If you qualify, the IRS will send you a notice explaining that AEP was applied. In most cases, you won’t need to take any further action.
AEP is a new program, so the rollout could take some time. While the IRS transitions from the old system, you could still receive a penalty notice on a return that should technically qualify for AEP. If you do, call the IRS and ask about First Time Abate. This is still an option while the IRS makes the switch.
Remember that AEP only removes the penalty. Any tax you owe, along with interest, is still due.
There may still be options available for those who don’t meet the three-year clean history requirement. Reasonable cause relief is still available if something outside your control caused the delay, like a hospital stay or a natural disaster. The IRS also issues special relief after major disasters, so it’s worth checking if your situation qualifies before assuming you’re stuck with the penalty.
Key Takeaways:
If you’re a high earner and maxing out your 401(k), you might wonder how you can put even more money toward retirement. Enter deferred compensation plans. They might sound complicated at first, but once you break them down, it’s easy to see how these employer-sponsored plans can provide another way to save beyond traditional retirement accounts. But that doesn’t mean these plans are always the right fit. Read on to determine if participating might make sense for you.
With a deferred compensation plan, you choose a percentage of your income to defer each year and get paid later, usually in retirement. Your employer holds onto that money and pays it out on a schedule of your choosing when you sign up. Typical choices include a lump sum at retirement or payments spread over several years.
These plans are available as two different types: qualified and nonqualified. Qualified plans, like 401(k)s, follow strict IRS rules and protect your money if your company goes out of business. Nonqualified deferred compensation plans (NQDCs) don’t have those same protections.
Generally, you don’t pay federal income tax on compensation at the time of deferral. Instead, you pay income tax when the money is paid out to you.
Here’s the potential tax-planning opportunity this creates: If you defer income while you’re in a high tax bracket and receive it after retirement when your tax rate is lower, you could ultimately pay less federal income tax on that money.
However, that isn’t a guarantee. Future tax rates and your retirement income can change, so you’ll need to consider how deferred payments fit with your other sources of taxable income.
Whereas 401(k)s and IRAs have annual contribution limits, deferred compensation plans do not. In 2026, 401(k) contribution limits are $24,500, plus catch-up contributions if you are 50 or older. IRAs cap out even lower. You can defer bigger chunk of income, like your total annual bonus, with a deferred compensation plan, which is why they attract high earners.
There is a difference in ownership as well. The funds in your 401(k) belong to you. Your 401(k) is legally protected and portable if you change jobs. Money in a deferred compensation plan is technically your employer’s asset until it is paid out to you. If your company has financial trouble or files for bankruptcy, you could end up losing some or all of that money.
Deferred compensation plans have real benefits, but they have just as real drawbacks to consider.
The upside: higher contribution limits, tax deferral, and an opportunity to set aside more income in high-earning years.
The downside: your money isn’t protected, you usually can’t touch it early without penalty, and you’re often locked in once you set your payout schedule.
And perhaps the biggest tradeoff to consider: If your company goes under, you could walk away with nothing.
First, you need to make sure you’re taking full advantage of your other retirement accounts, such as 401(k), IRA, and HSA. Deferred compensation plans work best for people who’ve already maxed out their retirement accounts, have stable income, and have faith in their company’s financial health. If that all checks out, a deferred compensation plan could be a smart move. But if you’re worried about job security, or you don’t have a grasp on your company’s financial health, think twice before making any moves and talk to a tax professional before taking the leap.
Key Takeaways:
If much of your retirement savings are held in a traditional IRA or 401(k), you could get a significant tax surprise when you start making withdrawals. A Roth account, on the other hand, offers tax-free qualified withdrawals.
But don’t convert to a Roth account simply because tax-free income sounds better than taxable income. After all, you’re paying for that future tax benefit upfront. With a Roth conversion, you pay income tax on the money you convert in the year you convert it. Whether that upfront tax bill is worth it depends on your income, tax bracket, and retirement plans.
A Roth conversion shifts money from a traditional IRA or 401(k) into a Roth account. When you convert from these pre-tax accounts, the amount converted generally counts as taxable income that year. For example, if you convert $50,000, you could add $50,000 to your taxable income.
Once the money is in the Roth account, however, it can grow tax-free. Qualified withdrawals are also tax-free. And unlike traditional IRAs, Roth IRAs don’t require the original account owner to take required minimum distributions (RMDs).
The basic goal of a Roth conversion is to pay taxes when your rate is relatively low rather than waiting and potentially paying a higher rate later.
For instance, if you recently retired, you may be in a lower tax bracket than you will be once Social Security and RMDs begin. That lower-income window could be an ideal time to consider a Roth conversion.
On the flip side, if you’re currently earning a high salary but expect a significant drop in taxable income after retirement, paying taxes on a conversion now may not be the right move.
Your income, tax bracket, retirement timeline, and future income sources all need to be considered when thinking about a Roth conversion.
Converting too much at once could create a large tax bill. It could also push some of your income into a higher tax bracket. Instead, convert just enough each year to keep within your current tax bracket. This method prolongs the process, but it keeps your tax bill under control. However, it isn’t something you want to guess at. A tax professional can help you figure out the right approach for your situation.
Medicare Part B and Part D premiums are based on your income from two years back. If a Roth conversion boosts your income, you may pay an income-related surcharge known as IRMAA (income-related monthly adjustment amount). This can trigger higher Medicare premiums.
There are a couple of circumstances where a conversion may not be the right move:
You also need to consider how you’ll pay the conversion tax. Ideally, you want to use money outside of your retirement accounts so the full converted balance remains untouched.
Whether a Roth conversion makes sense depends on your current income, your future income, and how long the money can grow. Everyone’s circumstances are different, and there is no one-size-fits-all approach here. Talk to a tax professional who can help you tackle the numbers and come up with a plan.
Key Takeaways:
Becoming wealthy doesn’t necessarily require a high-paying career, a successful business, a grand inheritance, or a winning lottery ticket. Plenty of people reach millionaire status without any of that, but it requires discipline and strategy. Here are the habits that offer a realistic path to wealth for middle-class income earners.
If you want to build wealth, you need to have money left over to save and invest. This won’t happen if your lifestyle increases when your income increases. Spending everything leaves you with nothing left to grow.
Middle-class income workers who build real wealth aren’t necessarily earning more. They simply keep a gap between their income and their spending. When they get a raise or a bonus, they save or invest it. They don’t spend it on material upgrades. This is the foundational habit of building wealth.
Steer clear of credit card debt and other high-interest borrowing. Pay off your cards in full and save for big purchases instead of financing them. Consumer debt claims your money that could be used to build an emergency fund, invest, or increase retirement contributions.
If you’re serious about building wealth, paying off high-interest debt is one of the smartest moves you can make. And once you’ve accomplished it, consider shifting some of the money you used for debt payments to savings and investments.
Your take-home pay may not stop with your paycheck. If your company matches 401(k) contributions, contributing enough to receive the full match can immediately increase what goes toward your retirement. That’s real money. Don’t walk away from it.
The same goes for health savings accounts (HSAs), tuition assistance, life insurance plans, employee stock programs, wellness incentives, or other perks in your benefits package. Make a habit of reviewing what’s available during open enrollment each year.
An employer-sponsored 401(k) is a solid start, but don’t stop there. People who build lasting wealth look for additional investment opportunities, like Roth IRAs and regular brokerage accounts.
Diversifying investments gives you more control and more options down the road, instead of relying on a single employer-run plan. A simple, low-cost index fund, added to consistently, does most of the work on its own. The important part is consistency. Regular investing over many years gives compounding more time to work in your favor.
There will always be someone to compare yourself to. There will always be flashy cars, bigger homes, and more exotic vacations splashed across social media. Chasing these things can lead to endless expenses.
Instead, you decide what’s worth your hard-earned money. You decide what purchases genuinely improve your life. Invest in those things and leave the rest behind. This becomes especially important with raises and bonuses. Keep your expenses steady even when your income increases. This can free up significant money for investing without making your daily life feel restrictive.
For middle-class workers who want to build lasting wealth, the process is actually ordinary and boring: control spending, stay out of debt, maximize workplace benefits, and invest money consistently. It won’t happen overnight, but over years, your average paycheck can work to build something much bigger.
Key Takeaways:
Trump Accounts officially launched on July 4, 2026. Part of the One Big Beautiful Bill Act (OBBBA), these are long-term investment accounts created to help children build wealth from an early age. Here’s what parents should know.
A Trump Account is a new type of investment account for kids under the age of 18. It’s like a starter IRA. The child owns the account, but a parent or guardian manages it until that child turns 18. The money goes into low-cost index funds, where it is meant to sit and grow for years.
Any U.S. citizen under 18 with a Social Security number can have a Trump Account opened for them, but not every child gets government funding for their account.
Children born between January 1, 2025 and December 31, 2028, automatically get a one-time $1,000 seed deposit from the U.S. Treasury once the account is opened.
Parents or guardians can open a Trump Account by filing IRS Form 4547 or through the online portal at TrumpAccounts.gov. The deadline to open an account is one year before your child turns 18, but if your child was born in the eligible window to receive the $1,000 federal deposit, there’s no reason to wait.
Once the account is open, parents, grandparents, other family members, and even employers can chip in. Individuals can contribute up to $5,000 a year, and this is expected to adjust for inflation over time. Employers can contribute up to $2,500 a year on top of that, which won’t count toward the employee’s taxable income.
In addition to these deposits, three other types of deposits are also allowed:
Unlike a regular brokerage account, Trump accounts don’t allow you to choose individual stocks. Money is invested in low-cost mutual funds or ETFs that track a broad index of U.S. stocks, like the S&P 500. The law capped the fees at 0.10% to keep costs down. This approach is meant to be simple for long-term growth rather than short-term trading.
Family contributions are made with after-tax dollars, and the investments grow tax-deferred, meaning you typically won’t owe taxes while the money remains in the account. Taxes are usually due when the money is withdrawn.
The funds generally can’t be touched before January 1 of the year your child turns 18. There are some exceptions, like rolling over excess contributions or handling the account after a death. But for the most part, this is hands-off money until adulthood.
Once your child turns 18, the account converts to a traditional IRA, and normal IRA rules apply. That means withdrawals before age 59 ½ can trigger a 10% penalty on top of regular income tax, with the usual IRA exceptions.
Trump Accounts aren’t the only option for saving for a child’s future, and they’re not automatically the best one.
There is no right answer here, and many families can use more than one option. It’s best to treat Trump Accounts as one more tool available for planning your child’s financial future, but not the only tool.
Key Takeaways:
When planning for retirement, the focus is usually on how much to save, but many people overlook how much of that money could end up going to taxes. And then tax season rolls around, and they owe more than expected.
Retirement often brings several sources of income, which could mean a mixture of tax rules. Understanding those rules before retirement can help you avoid surprises and make your savings last longer.
Most pension income is fully taxable if your employer made contributions with pre-tax dollars.
Annuities can work differently. If you purchased an annuity with money you’d already paid taxes on, you usually won’t pay taxes on that same money again. But any growth your money earned inside the annuity is generally taxable when you receive your payments.
You may also be able to choose to have taxes withheld from these payments throughout the year, making it easier to dodge a large tax bill when you file your return.
Once you turn 73, the government requires you to withdraw a minimum amount from your traditional IRA or 401(k) each year. If you skip it or take out too little, you could end up owing a penalty worth 25% of the shortfall.
The smart move is to plan ahead. Some retirees start taking smaller withdrawals well before RMDs are required. This way, they’re not forced to take out a huge chunk in one year and land in a higher tax bracket.
Something that often catches people off guard is the fact that Social Security benefits can be taxed. Depending on your total income, up to 85% of your benefits may be subject to federal income tax. Income from retirement accounts, pensions, investments, and even part-time work can all affect how much of your benefit becomes taxable.
There’s a bit of good news for 2025 through 2028. The Trump tax bill created a federal deduction that gives taxpayers 65 and older an extra $6,000 off their taxable income ($12,000 for couples who both qualify). This is on top of the standard senior deduction already in place. It starts to phase out once your income passes $75,000 ($150,000 for joint filers). It won’t erase your tax bill, but it can reduce how much of your Social Security ends up getting taxed.
Retirees can continue to invest after they stop working, but income from those investments can create its own tax obligations. If you sell stocks, mutual funds, or other investments, you could be subject to capital gains taxes. Dividend payments may also be taxable, even if you leave the money invested instead of spending it.
Before selling investments, consider how the sale could affect your tax bill for the year. In some cases, spreading sales over multiple years may help reduce taxes.
State rules vary widely. Indian, for example, Social Security benefits or military retirement pay. However, withdrawals from traditional IRAs and 401(k)s, along with most private pension income, are generally subject to Indiana’s state income tax. Depending on where you live in the state, county income taxes may apply as well.
The tax rules above aren’t exactly hidden, but they’re easy to overlook until you get the tax bill. A little planning today can leave you with more income to enjoy in your golden years.
Keeping an open line of communication is important to us. We invite you to reach out to us either by phone, email, or this form to ask questions, request an appointment or talk about any finance-related matter that comes to your mind.
317-398-9753
8 Public Square
Shelbyville, IN, 46176
Your Business. Your Family. Our Priority.
A company owners’ potential for personal financial security usually depends on the success of the business. Our commitment and responsibility is to help keep your business running smoothly and to help achieve your personal financial goals. Whether you are a business or an individual, our specialized staff will provide you with assistance in all your tax, reporting, financial and business affairs.
We're proud members of:
Brammer & Yeend is an independently owned and operated member firm of CPA Connect, a companion association to CPAmerica International
Financial information and reporting should not be a diversion for business owners, instead, financial information should be accurate, available, and insightful. We leverage experience and technology to provide business owners with dynamic resources and management tools.
Our personal services are designed to help busy, successful families manage their finances and grow their wealth with confidence and peace of mind. We do this by working together with our business solutions, allowing us to partner with clients and coordinate business and personal planning in order to meet their most important goals.
We strive to provide excellent service and solutions that fit our client’s specific needs and are industry appropriate. Our experienced CPAs have worked with clients in a variety of industries and understand the intricacies of each and apply the best solution possible. Over the years we have serviced clients in industries including agribusiness, retail, construction, manufacturing, food & beverage and many more. Below are some of our industries where we have specialized experience and expertise.
Key Takeaways:
Missing a tax deadline can happen, and until recently, getting a tax penalty waived required contacting the IRS and formally requesting relief. Now, with the introduction of Automatic Exemption from Penalty (AEP), the IRS can automatically waive certain penalties for taxpayers with a good compliance record. Here’s what to know.
Since 2001, the IRS has offered penalty relief through its First Time Abate program. Under this program, taxpayers had to reach out to the IRS, explain their situation, and wait for their request to be approved and processed. The main issue with First Time Abate is that many taxpayers didn’t even know it existed.
The IRS aims to fix this with AEP. Instead of putting the burden on the taxpayer, the IRS checks your compliance history when you file your tax return and automatically determines whether you qualify. If you do, the penalty won’t show up on your account.
The defining qualification for penalty relief is a clean track record. If you’ve filed required returns and paid your taxes on time during the previous three years, you are likely eligible. For quarterly filers, the IRS generally reviews the previous 12 consecutive quarters.
AEP applies to three of the most common penalties: filing late, paying late, and missing a payroll deposit. Other penalties, like underreporting income, still need to go through the normal process. And a handful of specialized returns, including estate and gift tax filings, are also left out.
One of the biggest advantages of AEP is that taxpayers don’t need to fill out an application or call the IRS to claim the relief because the IRS reviews your eligibility when processing your return.
If you qualify, the IRS will send you a notice explaining that AEP was applied. In most cases, you won’t need to take any further action.
AEP is a new program, so the rollout could take some time. While the IRS transitions from the old system, you could still receive a penalty notice on a return that should technically qualify for AEP. If you do, call the IRS and ask about First Time Abate. This is still an option while the IRS makes the switch.
Remember that AEP only removes the penalty. Any tax you owe, along with interest, is still due.
There may still be options available for those who don’t meet the three-year clean history requirement. Reasonable cause relief is still available if something outside your control caused the delay, like a hospital stay or a natural disaster. The IRS also issues special relief after major disasters, so it’s worth checking if your situation qualifies before assuming you’re stuck with the penalty.
Key Takeaways:
If you’re a high earner and maxing out your 401(k), you might wonder how you can put even more money toward retirement. Enter deferred compensation plans. They might sound complicated at first, but once you break them down, it’s easy to see how these employer-sponsored plans can provide another way to save beyond traditional retirement accounts. But that doesn’t mean these plans are always the right fit. Read on to determine if participating might make sense for you.
With a deferred compensation plan, you choose a percentage of your income to defer each year and get paid later, usually in retirement. Your employer holds onto that money and pays it out on a schedule of your choosing when you sign up. Typical choices include a lump sum at retirement or payments spread over several years.
These plans are available as two different types: qualified and nonqualified. Qualified plans, like 401(k)s, follow strict IRS rules and protect your money if your company goes out of business. Nonqualified deferred compensation plans (NQDCs) don’t have those same protections.
Generally, you don’t pay federal income tax on compensation at the time of deferral. Instead, you pay income tax when the money is paid out to you.
Here’s the potential tax-planning opportunity this creates: If you defer income while you’re in a high tax bracket and receive it after retirement when your tax rate is lower, you could ultimately pay less federal income tax on that money.
However, that isn’t a guarantee. Future tax rates and your retirement income can change, so you’ll need to consider how deferred payments fit with your other sources of taxable income.
Whereas 401(k)s and IRAs have annual contribution limits, deferred compensation plans do not. In 2026, 401(k) contribution limits are $24,500, plus catch-up contributions if you are 50 or older. IRAs cap out even lower. You can defer bigger chunk of income, like your total annual bonus, with a deferred compensation plan, which is why they attract high earners.
There is a difference in ownership as well. The funds in your 401(k) belong to you. Your 401(k) is legally protected and portable if you change jobs. Money in a deferred compensation plan is technically your employer’s asset until it is paid out to you. If your company has financial trouble or files for bankruptcy, you could end up losing some or all of that money.
Deferred compensation plans have real benefits, but they have just as real drawbacks to consider.
The upside: higher contribution limits, tax deferral, and an opportunity to set aside more income in high-earning years.
The downside: your money isn’t protected, you usually can’t touch it early without penalty, and you’re often locked in once you set your payout schedule.
And perhaps the biggest tradeoff to consider: If your company goes under, you could walk away with nothing.
First, you need to make sure you’re taking full advantage of your other retirement accounts, such as 401(k), IRA, and HSA. Deferred compensation plans work best for people who’ve already maxed out their retirement accounts, have stable income, and have faith in their company’s financial health. If that all checks out, a deferred compensation plan could be a smart move. But if you’re worried about job security, or you don’t have a grasp on your company’s financial health, think twice before making any moves and talk to a tax professional before taking the leap.
Key Takeaways:
If much of your retirement savings are held in a traditional IRA or 401(k), you could get a significant tax surprise when you start making withdrawals. A Roth account, on the other hand, offers tax-free qualified withdrawals.
But don’t convert to a Roth account simply because tax-free income sounds better than taxable income. After all, you’re paying for that future tax benefit upfront. With a Roth conversion, you pay income tax on the money you convert in the year you convert it. Whether that upfront tax bill is worth it depends on your income, tax bracket, and retirement plans.
A Roth conversion shifts money from a traditional IRA or 401(k) into a Roth account. When you convert from these pre-tax accounts, the amount converted generally counts as taxable income that year. For example, if you convert $50,000, you could add $50,000 to your taxable income.
Once the money is in the Roth account, however, it can grow tax-free. Qualified withdrawals are also tax-free. And unlike traditional IRAs, Roth IRAs don’t require the original account owner to take required minimum distributions (RMDs).
The basic goal of a Roth conversion is to pay taxes when your rate is relatively low rather than waiting and potentially paying a higher rate later.
For instance, if you recently retired, you may be in a lower tax bracket than you will be once Social Security and RMDs begin. That lower-income window could be an ideal time to consider a Roth conversion.
On the flip side, if you’re currently earning a high salary but expect a significant drop in taxable income after retirement, paying taxes on a conversion now may not be the right move.
Your income, tax bracket, retirement timeline, and future income sources all need to be considered when thinking about a Roth conversion.
Converting too much at once could create a large tax bill. It could also push some of your income into a higher tax bracket. Instead, convert just enough each year to keep within your current tax bracket. This method prolongs the process, but it keeps your tax bill under control. However, it isn’t something you want to guess at. A tax professional can help you figure out the right approach for your situation.
Medicare Part B and Part D premiums are based on your income from two years back. If a Roth conversion boosts your income, you may pay an income-related surcharge known as IRMAA (income-related monthly adjustment amount). This can trigger higher Medicare premiums.
There are a couple of circumstances where a conversion may not be the right move:
You also need to consider how you’ll pay the conversion tax. Ideally, you want to use money outside of your retirement accounts so the full converted balance remains untouched.
Whether a Roth conversion makes sense depends on your current income, your future income, and how long the money can grow. Everyone’s circumstances are different, and there is no one-size-fits-all approach here. Talk to a tax professional who can help you tackle the numbers and come up with a plan.
Key Takeaways:
Becoming wealthy doesn’t necessarily require a high-paying career, a successful business, a grand inheritance, or a winning lottery ticket. Plenty of people reach millionaire status without any of that, but it requires discipline and strategy. Here are the habits that offer a realistic path to wealth for middle-class income earners.
If you want to build wealth, you need to have money left over to save and invest. This won’t happen if your lifestyle increases when your income increases. Spending everything leaves you with nothing left to grow.
Middle-class income workers who build real wealth aren’t necessarily earning more. They simply keep a gap between their income and their spending. When they get a raise or a bonus, they save or invest it. They don’t spend it on material upgrades. This is the foundational habit of building wealth.
Steer clear of credit card debt and other high-interest borrowing. Pay off your cards in full and save for big purchases instead of financing them. Consumer debt claims your money that could be used to build an emergency fund, invest, or increase retirement contributions.
If you’re serious about building wealth, paying off high-interest debt is one of the smartest moves you can make. And once you’ve accomplished it, consider shifting some of the money you used for debt payments to savings and investments.
Your take-home pay may not stop with your paycheck. If your company matches 401(k) contributions, contributing enough to receive the full match can immediately increase what goes toward your retirement. That’s real money. Don’t walk away from it.
The same goes for health savings accounts (HSAs), tuition assistance, life insurance plans, employee stock programs, wellness incentives, or other perks in your benefits package. Make a habit of reviewing what’s available during open enrollment each year.
An employer-sponsored 401(k) is a solid start, but don’t stop there. People who build lasting wealth look for additional investment opportunities, like Roth IRAs and regular brokerage accounts.
Diversifying investments gives you more control and more options down the road, instead of relying on a single employer-run plan. A simple, low-cost index fund, added to consistently, does most of the work on its own. The important part is consistency. Regular investing over many years gives compounding more time to work in your favor.
There will always be someone to compare yourself to. There will always be flashy cars, bigger homes, and more exotic vacations splashed across social media. Chasing these things can lead to endless expenses.
Instead, you decide what’s worth your hard-earned money. You decide what purchases genuinely improve your life. Invest in those things and leave the rest behind. This becomes especially important with raises and bonuses. Keep your expenses steady even when your income increases. This can free up significant money for investing without making your daily life feel restrictive.
For middle-class workers who want to build lasting wealth, the process is actually ordinary and boring: control spending, stay out of debt, maximize workplace benefits, and invest money consistently. It won’t happen overnight, but over years, your average paycheck can work to build something much bigger.
Key Takeaways:
Trump Accounts officially launched on July 4, 2026. Part of the One Big Beautiful Bill Act (OBBBA), these are long-term investment accounts created to help children build wealth from an early age. Here’s what parents should know.
A Trump Account is a new type of investment account for kids under the age of 18. It’s like a starter IRA. The child owns the account, but a parent or guardian manages it until that child turns 18. The money goes into low-cost index funds, where it is meant to sit and grow for years.
Any U.S. citizen under 18 with a Social Security number can have a Trump Account opened for them, but not every child gets government funding for their account.
Children born between January 1, 2025 and December 31, 2028, automatically get a one-time $1,000 seed deposit from the U.S. Treasury once the account is opened.
Parents or guardians can open a Trump Account by filing IRS Form 4547 or through the online portal at TrumpAccounts.gov. The deadline to open an account is one year before your child turns 18, but if your child was born in the eligible window to receive the $1,000 federal deposit, there’s no reason to wait.
Once the account is open, parents, grandparents, other family members, and even employers can chip in. Individuals can contribute up to $5,000 a year, and this is expected to adjust for inflation over time. Employers can contribute up to $2,500 a year on top of that, which won’t count toward the employee’s taxable income.
In addition to these deposits, three other types of deposits are also allowed:
Unlike a regular brokerage account, Trump accounts don’t allow you to choose individual stocks. Money is invested in low-cost mutual funds or ETFs that track a broad index of U.S. stocks, like the S&P 500. The law capped the fees at 0.10% to keep costs down. This approach is meant to be simple for long-term growth rather than short-term trading.
Family contributions are made with after-tax dollars, and the investments grow tax-deferred, meaning you typically won’t owe taxes while the money remains in the account. Taxes are usually due when the money is withdrawn.
The funds generally can’t be touched before January 1 of the year your child turns 18. There are some exceptions, like rolling over excess contributions or handling the account after a death. But for the most part, this is hands-off money until adulthood.
Once your child turns 18, the account converts to a traditional IRA, and normal IRA rules apply. That means withdrawals before age 59 ½ can trigger a 10% penalty on top of regular income tax, with the usual IRA exceptions.
Trump Accounts aren’t the only option for saving for a child’s future, and they’re not automatically the best one.
There is no right answer here, and many families can use more than one option. It’s best to treat Trump Accounts as one more tool available for planning your child’s financial future, but not the only tool.
Key Takeaways:
When planning for retirement, the focus is usually on how much to save, but many people overlook how much of that money could end up going to taxes. And then tax season rolls around, and they owe more than expected.
Retirement often brings several sources of income, which could mean a mixture of tax rules. Understanding those rules before retirement can help you avoid surprises and make your savings last longer.
Most pension income is fully taxable if your employer made contributions with pre-tax dollars.
Annuities can work differently. If you purchased an annuity with money you’d already paid taxes on, you usually won’t pay taxes on that same money again. But any growth your money earned inside the annuity is generally taxable when you receive your payments.
You may also be able to choose to have taxes withheld from these payments throughout the year, making it easier to dodge a large tax bill when you file your return.
Once you turn 73, the government requires you to withdraw a minimum amount from your traditional IRA or 401(k) each year. If you skip it or take out too little, you could end up owing a penalty worth 25% of the shortfall.
The smart move is to plan ahead. Some retirees start taking smaller withdrawals well before RMDs are required. This way, they’re not forced to take out a huge chunk in one year and land in a higher tax bracket.
Something that often catches people off guard is the fact that Social Security benefits can be taxed. Depending on your total income, up to 85% of your benefits may be subject to federal income tax. Income from retirement accounts, pensions, investments, and even part-time work can all affect how much of your benefit becomes taxable.
There’s a bit of good news for 2025 through 2028. The Trump tax bill created a federal deduction that gives taxpayers 65 and older an extra $6,000 off their taxable income ($12,000 for couples who both qualify). This is on top of the standard senior deduction already in place. It starts to phase out once your income passes $75,000 ($150,000 for joint filers). It won’t erase your tax bill, but it can reduce how much of your Social Security ends up getting taxed.
Retirees can continue to invest after they stop working, but income from those investments can create its own tax obligations. If you sell stocks, mutual funds, or other investments, you could be subject to capital gains taxes. Dividend payments may also be taxable, even if you leave the money invested instead of spending it.
Before selling investments, consider how the sale could affect your tax bill for the year. In some cases, spreading sales over multiple years may help reduce taxes.
State rules vary widely. Indian, for example, Social Security benefits or military retirement pay. However, withdrawals from traditional IRAs and 401(k)s, along with most private pension income, are generally subject to Indiana’s state income tax. Depending on where you live in the state, county income taxes may apply as well.
The tax rules above aren’t exactly hidden, but they’re easy to overlook until you get the tax bill. A little planning today can leave you with more income to enjoy in your golden years.
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Shelbyville, IN, 46176
