In this Roadmap to Retirement episode, I break down what “Trump accounts” are and when they may make sense for parents and grandparents. The account lets you contribute up to $5,000 per year and works like a non-deductible, after-tax IRA: your contributions come back tax-free, but any growth is taxed as ordinary income when withdrawn. The big draw is the federal $1,000 seed deposit for children born between January 1, 2025 and December 31, 2028, so if you’re eligible, I recommend taking the free money, investing it in a U.S. equity fund/low-cost ETF, and letting it grow. Beyond that, I generally see 529 plans as better for most people due to tax-free education withdrawals and possible state tax deductions, though a Roth conversion strategy could benefit affluent families aiming for long-term wealth. Sign-ups may happen via trumpaccount.gov or through tax filing, starting July 4.
Come back soon for a new episode with a returning guest!
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