Baby Bond Accounts and Strategic Tax Planning: Two Thumbs Up

The baby bond gets two thumbs up from this CPA tax specialist! That’s the first thing I say when someone asks me about the government Baby Bond Bank Account stories that hit the news and internet again last week. The next thing I say is, “let’s talk.”

What is the baby bond?

Watch parents, family and friends when they’re with the newest member of the family circle.  That’s the baby bond I’m talking about. It’s the bond that holds us together and nurtures the well-being of every member of our circle, from the youngest to the oldest, the weakest to the strongest.

The baby bond and your family circle.

The baby bond makes our circle stronger, safer and more financially secure. When families come together to plan for new or existing members of the family circle, amazing things happen. Below are real situations and problems some of my clients have faced which create this composite story of Gen Xer’s David and Lisa and what can happen when the family circle is brought closer with a precious baby bond.

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Sandwiched in the middle with family issues.

New clients, Lisa and David asked me to come to their home. Like many of the smart, well-educated Gen Xer’s, they find themselves caught in the middle, wanting to help Millennial children and Boomer parents who are experiencing financial and life issues, while their own circumstances have stretched them nearly to the limit.

We’re in their living room. David’s recently widowed mother, Susan, dealing with health issues, now lives with them. She’s in her recliner, David and Lisa, the love seat. I take the closer plaid chair and lean toward David. He wants to talk.

David and Lisa are pulled in opposite directions. They’re eagerly awaiting their first grandchild, but Jessica and husband Michael are struggling with demanding new careers, heavy student loans and peer pressure to move from their small apartment to a home of their own. They’re stressed. Both David and Lisa work, not yet ready or able to retire. They’re uncomfortable leaving his mother alone all day. They want some guidance.

The baby bond motivates!

Creative thinking, smart life choices and strategic tax planning were motivated by this family’s baby bond! Eight months after that first meeting in David and Lisa’s living room, we all meet again to celebrate baby Liam turning six months old and to review the status of their “baby bond.”  They’ve come a long way:

Great grandma Susan lives in a studio apartment in a nearby assisted living facility. Through a little publicized benefits program available to surviving spouses of veterans, along with her VA Survivors Pension, a small savings, no debt load, and a loving family close by, Susan is thriving, happy and making new friends. She kept her car, maintained her independence and discovered that granddaughter Jessica would catch a nap if she was there to cuddle the baby.

Jessica and Michael still wanted their own home, but realized they needed a plan first. They chose Dave Ramsey’s 7 Baby Steps and said if Liam was going to start with baby steps, they would too. They admitted that before they understood more about her parent’s own financial situation, they probably would have unwittingly put her folks in a difficult situation. It was during one our family meetings that David and Lisa told the kids not to be expecting expensive baby gifts, designer baby clothes and such. But they could expect great babysitters, moral support, help blowing out birthday candles, and they wouldn’t have to worry about Liam’s college education expenses.

Gen Xer’s, David and Lisa, made drastic life changes that involved some serious goal setting and strategic tax planning. They saw how close his mother had been to a serious financial problem and how adamant the kids were about adopting a lifestyle that included solid long term goals. They knew they only had a limited time to get themselves out of debt and make up for nearly thirty years without a planned financial life and retirement goal. If there were tax advantages to be used while they were still working, they wanted to use everything available, including a specific plan for Liam’s college funding.

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The baby bond made the difference.

New beginnings are often the catalyst for change in peoples’ lives, but real change can also begin with something as simple as being able to identify with someone else’s story. It’s often easier to understand why a business consults a CPA, but when we look at our family circle as a joined unit, we can also see that our LIFE is our business and deserves the same planning as any other big business. Whether it’s a new baby, the new year, a great idea or your last hope, it’s not too late to make a difference in your life.

Bottom line.

We establish and maintain a personal and business relationship with our clients. We know that Your LIFE Is Your Business, and Your BUSINESS Is Your Life, and we take both seriously.

Call us at 479-478-6831. Use my Calendy Page (it’s easy) to set an appointment, or contact me by email melanie@radcliffcpa.com

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Did you know? Sixty-four million plus Generation Xer’s grew up with the reputation of being somewhat ignored and independent ‘latchkey kids” who still don’t closely identify as a group, with just 41% even claiming the moniker “Gen X.” More about X’ers and who they are