What is a Trump Account?

A provision in the One, Big, Beautiful Bill Act created a tax-advantaged savings account for American children under the age of 18.  These accounts have been referred to as Trump accounts, and, while they are not officially available at this time, they expect to be fully rolled out later this year.  Information is somewhat limited, but for all the parents, grandparents, aunts and uncles out there, let’s break down this account and compare it to the traditional savings accounts for kids, the 529 Plan account and the UTMA savings/investment account.  The chart below summarizes the key points for each:

In my opinion, the 529 Plan account remains the best option for education savings.  For families that want more flexibility to benefit their kids in the future, the UTMA account, serves the best (though be mindful you lose control at the age of majority).  Trump accounts will likely raise awareness around saving and investing for kids and families but outside of the $1,000 for eligible newborns the benefits are somewhat limited.  Another great idea for kids is to get them working as early as possible and help them establish ROTH IRAs which are not taxed down the road.  Contact us with any questions!

Any opinions are those of Landon Vick and not necessarily those of RJFS or Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete; it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decisions.

Any opinions are those of Landon Vick and not necessarily those of RJFS or Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete; it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decisions. 529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.