depending on the state. Trump Accounts are much more restricted than UTMA and UGMA accounts. Get a Head Start on Retirement Under current law, the only opportunities available to save for retirement in a tax-advantaged way are through employer-sponsored retirement plans (such as the Nazarene 403(b) plan) or IRAs (Individual Retirement Accounts). Minors are not often eligible for employersponsored retirement plans, and they must have earned income from outside the home to be eligible for an IRA. Therefore, unless you have a child model or a teen with a job, there isn’t really any way to help them get a head start on retirement savings. With Trump Accounts, there now is. The accounts can be funded even if the child does not have any income and can be left to grow tax-deferred until retirement. Why would anyone think about retirement for a kid who hasn’t even left the house yet? The magic of compounding interest is based on time. The longer money is invested, the bigger it can grow. For example, if you deposited $5,000 into the account of a newborn and it grew at a 7% rate, by age 65 they would have $406,364. If you waited until that same child was 18 to invest, then they would have $120,228 at age 65. If they don’t invest that $5,000 until they start taking retirement seriously at age 45, then at age 65 they will only have $19,348. As you can see, time makes a big difference when it comes to investing. Let’s add in some tax planning strategy. If you put $5,000 into a newborn’s account, at age 18, it will have grown to $16,900. At that age, the child can convert the account to a Roth IRA by paying income taxes on the growth. In a 12% tax bracket, the tax on $11,900 of growth is $1,428. Now, those funds can grow in the Roth IRA until they become $406,364 at age 65. Since they’re in a Roth IRA, everything in the account can be withdrawn completely tax-free. That’s the power of tax planning and compounding interest. Trump Accounts can have a negative impact on college financial aid, so it’s important to consider all the pros and cons as you decide what type of account to use for your children. Amy Artiga is a Certified Financial Planner (CFP), a Certified Kingdom Advisor™, and author of the clergy personal finance blog PastorsWallet.com. Send questions for Amy to benefits@nazarene.org.
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PRESSING ON
The Christian Funeral BY DARON BROWN Two of the core duties of a pastor are to “preach the Word” and to “comfort those who mourn”.1 These responsibilities converge in the Christian funeral. The funeral service is one of the last remaining settings in which clergy have a welcomed public voice. Hearers, confronted by death, are more receptive. They want to know what we believe about life and death. They are hungry for rituals and words that make sense and meaning. In the absence of time-honored Christian ritual, people create their own rituals that lack substance. Without weighty Christian words, people opt for trite sayings and folk-theology. Funerals are public occasions for Christian worship. Funerals are gospel-work. They witness to the community and the wider world about the story of God. A person’s funeral is the other bookend to their baptism. Funerals never come at convenient times. As much as possible, the pastor should clear their schedule and give serious attention to the funeral service and ministry to those affected. Hold a listening session with loved ones before the service. Ask questions. Invite stories. Take notes. Get a sense for the person’s life. Doing so will help the family grieve and will help the pastor create NBUSA Quarterly