Trump Account thoughts

[sigpros]

It seems like a no brainer if you have a little one that qualifies for the seed money especially if you can get the extra $250. I am little torn on if I should do one for my daughter. She is 17 so I can only do it for one year but that would still be $5K I could set back for her. I know a lot of people will say just do a Roth but she doesn't have a job, she is too busy with school and dance. So for the guys on here that know a lot more than me, do you think it is still worth it to do one? I kind of feel that it is since it would be since to potential for $500K to be there when she is 65-67 is very real

 

[Charlie Bob]

What could go wrong ?

 

[Nick87]

This ought to trip some triggers.

 

[jimh406]

From what I understand, a Trump account converts to a traditional IRA at 18. You could convert it to a Roth.

A Roth, if she meets the requirements with income, would make more sense since it grows tax free, and there aren't any required minimum distributions.

I think you'll likely have more control over investments if it's a Roth although I don't know for sure.

 

[sigpros]

From what I understand, a Trump account converts to a traditional IRA at 18. You could convert it to a Roth.

A Roth, if she meets the requirements with income, would make more sense since it grows tax free, and there aren't any required minimum distributions.

I think you'll likely have more control over investments if it's a Roth although I don't know for sure.

Agreed it does convert to a traditional IRA at 18. And if you could roll it over that would be a big plus since her income should be really low as a college student

 

[Exhausted]

It seems like a no brainer if you have a little one that qualifies for the seed money especially if you can get the extra $250. I am little torn on if I should do one for my daughter. She is 17 so I can only do it for one year but that would still be $5K I could set back for her. I know a lot of people will say just do a Roth but she doesn't have a job, she is too busy with school and dance. So for the guys on here that know a lot more than me, do you think it is still worth it to do one? I kind of feel that it is since it would be since to potential for $500K to be there when she is 65-67 is very real

I have three kids. None of them are born in the timeframe to get the initial seed money so I have just kind of disregarded the whole thing. I assume there are other accounts I can open for them that are just as good (even if the account is held in my name until they are 18).

 

[noharleyyet]

This ought to trip some triggers.

 

[mevertsen]

My daughter doesn't qualify for the seed money.

Other than that, next best thing seems to just be a standard custodial account.

Maybe only advantage after that is the Trump account converts to IRA at 18.

 

[Bonasababy]

I have told my kids that they should get into it for their kids, my grandkids, but not kick any extra funding into it. Any additional funds are better spent on better options. Get in, get your 1000 bucks, then sit back and stick your money elsewhere.

I place a low level of worry on it but remember these are only allowed to invest in index funds, some of which right now have an outsized amount of tech in them.

 

[TOGIE]

it would be stupid not to try and get some free money.

but my kids don't qualify for the cool grand and my zip code doesn't qualify for the 250. so, bleh. there other ways to get them started.

 

[Nick87]

it would be stupid not to try and get some free money.

but my kids don't qualify for the cool grand and my zip code doesn't qualify for the 250. so, bleh. there other ways to get them started.

Don't they have to be born this year? Or in 25?

 

[TOGIE]

i think it's between 16 and 24 to be eligible for 250 dollars if your zip codes median income is below 150k. and it's 2025 through 2028? for the grand.

edit: 10 years or younger born before 2025 for the 250 actually. and it looks like apparently there are some regional 250's available with different qualifications.

 

[Charlie Bob]

What a great deal , give the kids the money now , and they can pay it off for the rest of their lives .

 

[homers]

It seems like any after tax money a parent would contribute is eligible to be withdrawn later tax free. Seems like that is a Roth but without income limits most 0-16 year olds are challenged with earned income Roth requirements.

 

[westbranch]

It seems like any after tax money a parent would contribute is eligible to be withdrawn later tax free. Seems like that is a Roth but without income limits most 0-16 year olds are challenged with earned income Roth requirements.

Yep, earnings/growth is tax deferred and no earned income requirements. And no kiddie tax like there is with a UTMA account.

 

[noharleyyet]

What a great deal , give the kids the money now , and they can pay it off for the rest of their lives .

Would'ja stop with the pitch pipe occasionally...

 

[Mallardsx2]

Good gig if your a newborn American citizen born between 2025 and 2028.