My one issue: An 18 year old with an 18 year account given $5k/year by others. With that much money could it make our young adults lazy? Withdrawal restrictions need to be strict. Hopefully watching it grow will change their way of thinking as Trump advised against spending it. The real kicker is Trump's name on the accounts-gotta infuriate the left. Are the rats proud of Obamacare?
Now if they could just make them Roths.
The real kicker is Trump’s name on the accounts-gotta infuriate the left.
Amen the left will be gnawing on their chairs.
I just mowed yards and bucked bails.
I think this is what Social Security should have been turned into back in the 70s. Maybe this is a step toward that path?
Had my SSA contributions gone into even a slow-growth fund back in the 1970s instead of a Fedzilla slush fund, I would be a lot better off today.
The 18-year old you reference will have choices. College, Trade School, or blow it all on drugs and a new motorcycle. Needs oversight.
I don’t think it will create a generation of trust fund babies, but you never know.
I support this plan.
My granddaughter's minor account (a UGMA account made before the OBBB and Trump accounts) has $7,349, up $2,349 from the original $5,000 I put into it 14 months ago shortly after she was born. Up 47% in 14 months. Withdrawals from it will face capital gains taxes.
But the Trump accounts will be taxed like IRAs after the kid turns 18. In other words, all withdrawals will be taxed like normal income. With UGMA accounts (minor accounts like we've had for years) the withdrawals will be taxed at capital gains rate, not normal income tax rate. If it's a large amount, the capital gains rate is better.
The exception would be if the young adult (after 18) isn't working and does withdrawals from the Trump account. Because normal income tax has a high standard deduction, withdrawals from a Trump account would allow for a huge portion to be not taxed until taxes kick in. But if the young adult is working anyway (and making more income to max out the standard deduction) and adds to that withdrawals from the Trump account, then it would be taxed less if it was in a standard UGMA (lower tax rates for long term capital gains). So whether a UGMA account or Trump account is better depends on if the "kid" will be working while taking withdrawals.
Another difference, Trump accounts last I read have limitations on what kind of mutual funds you can invest in. Things like index funds only. UGMA accounts can invest in any mutual fund type (my granddaughter's is split between a S&P 500 index fund and a small-cap value fund). So on investing options, UGMA's win.
One thing that's good about Trump accounts though is free money from the government to start it. As far as free money goes, Trump accounts are better.
And I’m going to listen to CBS News tell me “what to know”? About anything?!
Rely on SeeBS’s account of the program? Don’t think so.
Vanguard’s VOO - an S&P Index fund is up 21.03% for the year.
The corrupt ‘press’ will do their best to use the lowest numbers possible in their calculations as a way to degrade the program. White liberal elites hate the working class and their children.
Starting with 21.03% is a really nice start...
And the minute the Dems take control again, these accounts will be confiscated or repurposed to support their agenda.