About this project
Help Me Share with Others a Simple Idea that May Forever Change the Lives of their Children
My project is to complete the writing of and publication of my sixth book From Cradle to Retirement – The Child IRA – How to start a newborn on the road to comfortable retirement while still in a cozy cradle. Would you back my project because it will allow me to begin sharing this simple idea that could help parents make their children financially independent? Backing my project will see From Cradle to Retirement be published and begin the financial literacy campaign that naturally flows out of it. Once fully funded, I will introduce stretch goals that will be attached to specific portions of that financial literacy campaign.
The Child IRA is like combining the power of compounding of a 401k plan with the flexible contributions allowed by a 529 plan. From Cradle to Retirement, while briefly exploring the historic attitudes of America regarding retirement policy, focuses on explaining the concept of The Child IRA. Through real-life case studies, it demonstrates how families are today establishing IRAs for their minor children. The book contains interviews with people within industries that regularly employ minor children – including newborn babies (hint: think “advertising”) to give parents some idea as to what their children might be able to do in order to establish a Child IRA. It even shows how to “catch-up” if you didn’t start a Child IRA the first year your child was born (including what needs to be done if they start as late as college graduation). Finally, From Cradle to Retirement addresses what types of policy changes might make The Child IRA more accessible to a greater number of families – and how it might just save Social Security. You can read more about The Child IRA by going to the web-site ChildIRA.com.
My Passion for This Project Explained
I was too young to do anything about it then, but I’ll never forget that helplessness. I’ve always thought, “If only I could have done something…” Now I can.
I remember growing up in the shadows of the gargantuan steel mill complex. At its peak, it employed 30,000 people, including the parents, grandparents, and other family members of many of my elementary school classmates. But then the world changed. Suddenly, the dozens of smoke stacks stopped belching. The steel plant was gone. And with it, thousands and thousands of jobs, thousands and thousands of hopes, thousands and thousands of dreams.
To me, those many thousands weren’t merely faceless statistics, but the very human community that touched my young life every day. Each one of these good, kind, caring neighbors believed in the promise of the establishment that controlled their lives. When the factory shut its doors that final time, so too did those institutions. The company failed them. The union failed them. The government failed them. They lost everything – their jobs, their retirement plan, and, unfortunately, sometimes even more.
Worse, we lost our community. As families moved away in search of jobs, the once bustling six lane highway that fed into the heart of the plant now had an eerie resemblance to the main street of an abandoned ghost town. The rusting remnants of the aging rolling mills, coke ovens, and blast furnaces tormented those brave enough to remain with the taunting memories of what once was.
I watched this sad drama unfold. I was too young to do anything about it then. But I never forgot the helplessness. Though I lamented, “If only I could do something…,” I vowed to forever strive to come up with some idea that would prevent innocent people from ever again falling victim to those large institutions who, despite good intentions, will never see them as anything more than faceless statistics.
Today’s Headlines Predict Further Harm to Those Who Continue to Rely on the Kindness of Strangers
As recently as this summer we’ve seen headlines predicting the coming insolvency of Social Security. Quite simply, this government run safety net is spending more money than it’s taking in. Officials predict the Social Security Trust Fund will be depleted in 2034 (“A Summary of the 2017 Annual Reports,” Social Security and Medicare Boards of Trustees, July 2017). Furthermore, the reports does not predict the situation will resolve itself, and it’s projections extend 70 years to nearly the end of this century.
It’s clear that within two decades, Social Security will be fundamentally changed in a disruptive way. Many of the financial professionals I’ve interviewed tell me they, when making retirement calculations, advise anyone less than age 50 to not count on receiving Social Security. If this is what experienced financial veterans tell their adult clients, imagine what those same adults think about their own children’s ability to receive the promise of Social Security. They fear the funds simply won’t be there for their children. They feel betrayed by promises not kept. They feel helpless to do anything about it. It’s the steel plant all over again.
The Happy Accident of Discovery
In the intervening years, and especially in the last decade, I’ve interviewed hundreds of people involved in the retirement industry – from people saving for retirement to retirement plan service providers to state and government regulators. These interviews have produced hundreds of stories, articles, and reports published for national audiences by print and digital media outlets. As a result of this experience, my thoughts and opinions have been sought out and broadcast on various national TV and radio networks. But it wasn’t until I made a mistake on a spreadsheet I used in one of my previous books (Hey! What’s My Number? How to Increase the Odds You Will Retire in Comfort, Pandamensional Solutions, Inc, 2014) that I accidentally discovered an incredibly easy solution to better prepare Americans for retirement without relying on the kindness of government, their employer, or any other stranger. That’s when I discovered The Child IRA.
It happened when I was using a graphic I often used when teaching Boy Scouts the Personal Management merit badge. This merit badge, which every Eagle Scout must earn, contains a section that explains “the time value of money,” or compound interest as we often call it. I would demonstrate this through two characters: Early Earl and Late Larry. Early Earl was – you guessed it – the same age as the typical Boy Scout I’d teach. He’d begin saving $1,000 a year at age 15 and continue through age 30. Late Larry would also save for sixteen years, only he would start, well, later. At age 40. And to make up for his tardiness, he’d save five times more - $5,000 a year. Despite saving this greater amount, by the time they retire, Early Earl’s savings would have grown 50% more than Late Larry’s. That’s the power of compound interest.
Now, as I was running through my numbers prior to the publication of Hey! What’s My Number? I accidentally entered a “0” for the age Early Earl would start saving. Naturally, I quickly caught the error and fixed it, but not before curiosity caused me to explore the idea of beginning to save immediately after being born. That little trek created a new character – “Turbo Tot.” Compared to Early Earl and Late Larry, Turbo Tot’s savings grew astronomically, ending at age 70 with almost three times more than Early Earl’s total and into the “multi-millionaire” range. In the subsequent articles I wrote on this discovery, I labeled Turbo Tot’s savings plan “The Child IRA.”
If there were a way for every newborn child to retire a multi-millionaire, wouldn’t every parent want to know it?
The concept is quite simple. From the moment the baby is born, you save $1,000 a year in a Child IRA until the baby’s 19th birthday. Then you do nothing. If that money is invested for the long-term and earns 8% (which is 3% less than the average 11% long-term return for stocks), then, when that child retires at age 70, the Child IRA account would have grown to two-and-a-quarter million dollars.
Alas there’s a catch. There is no such thing as a “Child IRA.” In reality, parents can do this today in a traditional IRA, but there are restrictions which limit whether a child qualifies. Don’t you think parents want to know what they could do right now to allow their child to benefit from a Child IRA? Back my project and help me provide them with those answers.
Risks and challenges
The book From Cradle to Retirement – The Child IRA – How to start a newborn on the road to comfortable retirement while still in a cozy cradle, is nearing completion. There is always a risk I will become incapacitated and the book will lay unfinished. But I’ve already written five books, so I have a good idea as to what it takes to wrap up the manuscript and turn it into a bound volume. You should know the importance of the publication date – September 12th – that’s my daughter’s birthday. It will mean a lot to me for the book to be published on that date, so you know I’m motivated to get this project done.
The good news is that the publisher is already lined up and ready to roll. The book’s promotional campaign has been created and the first fruits of that have already begun to take shape (I plan to promote the book through organizations that promote financial literacy, savings, and family financial wellness. Of course, even though several of these organizations have already invited me to promote From Cradle to Retirement, there is a risk the others won’t. But I’m confident most of them will.Learn about accountability on Kickstarter
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