r/stocks
What are we thinking about on Trump Accounts
User expresses excitement over rumored 'Trump Accounts' for youth retirement but provides unverified details and no specific stock picks.
- The post relies on unverified rumors and lacks credible sources or factual basis.
- No specific investment thesis or ticker analysis is provided, making it irrelevant for stock selection.
I’m personally very excited as it will be good for the younger generation to get a head start for retirement. some quick details is that it will be on a us brokerage I that I can’t remember, US equities only. also if you were born very recently like 3 years ish ago I believe you will get a free 5k or 1k in your trump account. it will be lanuched during July 4th americas 250th birthday. overall I’m very positive what about you.
If you read the fine print. It's essentially a scam account.
Setting up kids with an account at birth is a good idea imo. I don’t know enough about the details with Trump accounts, but it seems solid at a glance. My first kid missed it by a year, but we gotta start somewhere.
This can potentially be a great stepping stone to creating a a sovereign wealth fund funded by taxing mega tech and/or AI companies. Norway did it with oil and it works really well. If we set up a tax and paid “dividends” into the “Trump” accounts it could set up the next generation for a great future and protect them from the downsides of AI. I doubt this is Trumps goal, but maybe the next administration will be open to it.
My accountant told me it creates loopholes to avoid paying inheritance taxes
So definitely great for rich kids
Yes it does provide advantages to rich kids, though also I’m pretty sure college accounts let people gift up to 15 grand not taxed?
Fuck inheritance tax. The money was already taxed and the government wants to rip their greedy fucking hands into the cookie jar again. I dont care if the primary beneficiary is rich kids its bullshit for absolutely everyone.
I don’t think your accountant is right. Family/friends can contribute a combined aggregate $5,000/year. Contributing $5k/year up to 18 is $90k in contributions, but the lifetime gift limit is $15M per individual. Rich people who can contribute $90k over 18 years will have benefits, but the limits are too low to make a meaningful difference towards inheritance taxes.
Today's America is a joke. Let an illiterate rapist become president. Ridiculous, truly ridiculous.
What does that have to do with the investment account for children though?
You put in money you paid taxes on and you pay taxes on withdrawals. It is a scam essentially because a 529 account would avoid taxes on qualified distributions
But you do get to skip capital gains right, I personally see this more as a child brokerage account
Just get the free $1k and then open a traditional children's account with a real bank.
I’m doubtful they’ll actually fund it. I spoke about this with my tax accountant when we were filing and she’s also skeptical they’ll be funded by the fed. They will be funded though. From my understanding, signing up for the account forces it open and the fed funds it “if” there is money. If they can’t set aside enough funds, the taxpayer(s) is(are) obligated to kick in that first $1,000.
For reference, my tax accountant has like 40 years in the business and runs an H&R. Also, she doesn’t talk politics, so it isn’t some anti pres hot take or whatever.
At least this is where we were at in April. Personally, I figured I’d skip the middle man, maybe a scam, situation and kicked an extra k into the kids accounts.
But then you pay hefty capital gains
It's like a non-deductible IRA. At 18yo and after the kid (now adult) can withdraw and pay taxes, or they can convert to Roth. If parents are well-off to help the kid pay taxes when at a low rate (avoid kiddie tax though), it can be turned into a large balance Roth early in adulthood (20s). If left untouched until old age, the adult kid will have a huge nest egg tax free.
Allowing stock contributions is even being considered, another feature to benefit the well-off.
An annoyance of these accounts is contributions by parents/others seems to require gift tax returns.
If these 530A accounts had $1k to new borns from the government going forward and not via political donors, in theory, progressives would champion such accounts as the structure is similar to Baby Bonds concept.