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What Trump Accounts Could Mean For Your Family · DEEP INSIGHT

• 0:00
  Speaker 1: Super Bowl viewers this year may catch an ad for
• 0:03
  Speaker 1: Trump accounts.
• 0:04
  Speaker 2: This year, every American child gets.
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  Speaker 1: An investment account and millions will be prefunded.
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  Speaker 2: That's free money we can all expend.
• 0:12
  Speaker 1: American Dream sign me up.
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  Speaker 2: Trump accounts were enacted via President Donald Trump's Big Beautiful
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  Speaker 2: Bill in July, and they are investing accounts for kids
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  Speaker 2: under the age of eighteen, and kids born between twenty
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  Speaker 2: twenty five and twenty twenty eight are eligible for one
• 0:31
  Speaker 2: thousand dollars seed money from the Treasury Department. In addition
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  Speaker 2: to the seed money, families can contribute up to five
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  Speaker 2: thousand dollars per year. There's been a growing number of
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  Speaker 2: employers who have also pledged to match the one thousand
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  Speaker 2: dollars seed money from the Trump administration for their employees,
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  Speaker 2: and then there's been philanthropists as well.
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  Speaker 1: Here's what to know about Trump accounts.
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  Speaker 3: There's been a huge push to raise awareness about Trump accounts,
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  Speaker 3: especially in recent weeks.
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  Speaker 1: You could only.
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  Speaker 3: Open a Trump account for the first time with the
• 1:08
  Speaker 3: start of tax season, which just kicked off on January
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  Speaker 3: twenty sixth, So in the days that followed there's been
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  Speaker 3: a lot of different efforts to kind of raise awareness
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  Speaker 3: about Trump accounts. There's a billboard in Times Square. There
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  Speaker 3: was a Trump account summit that live streamed from Washington,
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  Speaker 3: d C. The administration is kind of pulling out all
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  Speaker 3: the stops to get the word out, and one of
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  Speaker 3: the things is this ad that's going to run before
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  Speaker 3: the Super Bowl.
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  Speaker 1: One million people signed up for Trump Accounts in the
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  Speaker 1: first six days of tax season, according to the White
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  Speaker 1: House x account and.
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  Speaker 3: The idea is that many millions more could sign up
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  Speaker 3: after seeing the ad on Sunday. So the idea I
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  Speaker 3: think behind the Super Bowl ad is to kind of
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  Speaker 3: get a lot of Americans interested in it and not
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  Speaker 3: be so partisan.
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  Speaker 2: We're seeing this reoccurring theme of it being patriotic account
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  Speaker 2: and opportunity for all Americans pursuing the American dream.
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  Speaker 3: The idea behind Trump Accounts is that any child can
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  Speaker 3: share in wealth building opportunities. It's previously been kind of
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  Speaker 3: an ongoing issue that not everyone is invested in the
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  Speaker 3: stock market. Not everyone shares in the same opportunities to
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  Speaker 3: build wealth, and investing is a huge part of that.
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  Speaker 1: The top twenty percent wealthiest American households own nearly ninety
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  Speaker 1: three percent of all stock in the US, and this is.
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  Speaker 3: A way to kind of level the playing field.
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  Speaker 2: It definitely comes at a time where affordability is a
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  Speaker 2: major issue for Americans, where in a midterm election year,
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  Speaker 2: and so the Trump administration has been increasingly focused on
• 2:42
  Speaker 2: economic policy.
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  Speaker 3: So this is one way to kind of address those
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  Speaker 3: needs head on by reaching out to individual households offering
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  Speaker 3: an opportunity to start an investment account for children and
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  Speaker 3: have that account grow over time. Plus the initial seed
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  Speaker 3: money really gets people's attention and why wouldn't you want
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  Speaker 3: that kind of funding or free money, which is really
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  Speaker 3: what it is.
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  Speaker 2: But there are some potential barriers for those who don't
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  Speaker 2: know how to opt in or don't opt in.
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  Speaker 3: You have to file a form when you fill out
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  Speaker 3: your tax reform in order to open an account, or
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  Speaker 3: you can sign up online, but that does leave out
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  Speaker 3: some people that may not take that initiative or they
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  Speaker 3: don't even file a tax return, and that would be
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  Speaker 3: primarily low income families.
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  Speaker 2: There's certainly been a bipartisan push to make investing more
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  Speaker 2: accessible to the masses. This idea of being able to
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  Speaker 2: generate wealth from infancy could potentially have the power to
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  Speaker 2: grow a significant amount of money when considering, you know,
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  Speaker 2: long term impact Trump accounts. Dot gov projects that a
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  Speaker 2: thousand dollars deposit could grow to six thousand dollars by
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  Speaker 2: age eighteen, fifteen thousand by age twenty seven, or two
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  Speaker 2: hundred and forty three thousand by age five, and that's
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  Speaker 2: based on S and P five hundred historic annual average
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  Speaker 2: returns of over ten percent. However, those are optimistic projections
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  Speaker 2: according to some analysts. In fact, there are some that
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  Speaker 2: have predicted that US stock market returns could be lower
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  Speaker 2: potentially over the next decade.
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  Speaker 3: And that means that the Trump account may not grow
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  Speaker 3: as much as initially projected. And I mean there's a
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  Speaker 3: chance it could even go down if there's a real
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  Speaker 3: obstacle ahead.
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  Speaker 2: That's been one of the criticisms of Trump accounts is
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  Speaker 2: whether or not families can afford to continually make to
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  Speaker 2: max out those accounts throughout those years, which would reach
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  Speaker 2: those long term growth projections that we've seen from the
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  Speaker 2: Trump administration. Most advisors would recommend that if you're eligible
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  Speaker 2: for the one thousand dollars Treasury seed money, the matching
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  Speaker 2: contribution from an employer or a gift from philanthropists, to
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  Speaker 2: absolutely take that free money, open the Trump account, take
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  Speaker 2: that free money, but then beyond that to consider other
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  Speaker 2: account options as well, because there are varying tax implications
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  Speaker 2: of both Trump accounts as well as other options, and
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  Speaker 2: you really have to consider your family's goals.
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  Speaker 1: Overall, the money that accumulates in Trump accounts will be
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  Speaker 1: partially subject to regular income taxes when it's withdrawn. A
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  Speaker 1: five twenty nine college savings plan, on the other hand,
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  Speaker 1: is tax defer and.
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  Speaker 2: The money can come out tax free for qualified education
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  Speaker 2: expenses like tuition and other expenses related to college. You
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  Speaker 2: also have the option to potentially roll the unused balance
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  Speaker 2: of up to thirty five thousand dollars into a roth
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  Speaker 2: iray for beneficiaries.
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  Speaker 1: Another option available to families is a UGMA or UTMA
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  Speaker 1: custodial account for minors, a form of taxable investment account
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  Speaker 1: with no contribution limits. Families can also open a custodial
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  Speaker 1: roth ira, but the child needs to earn income to
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  Speaker 1: be eligible.
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  Speaker 3: One of the key elements of a Trump account is
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  Speaker 3: that money is locked away. Once you contribute to a
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  Speaker 3: Trump account, you really can't take the money back out.
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  Speaker 3: It's pretty much locked there until the beneficiary turns eighteen,
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  Speaker 3: so it's not a substitute for a type of savings
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  Speaker 3: account where you may need to make withdrawals. You really
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  Speaker 3: can't do that with a Trump account without penalties.
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  Speaker 1: How many families actually take advantage of Trump accounts remains
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  Speaker 1: to be seen. A July report from Credit Karma found
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  Speaker 1: that fewer than one quarter of parents polled had a
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  Speaker 1: five to twenty nine account for their children.
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  Speaker 3: The chance to collect any sort of free money from
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  Speaker 3: the federal government is a really big deal. Just like
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  Speaker 3: you would want to get the employer match ree or
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  Speaker 3: four oh one K, you really don't want to turn
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  Speaker 3: down the opportunity for this one thousand dollars seed money
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  Speaker 3: if your child is eligible for it. So experts across
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  Speaker 3: the board pretty much recommend at least opening the account
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  Speaker 3: and benefiting from either the federal government's money or there
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  Speaker 3: could be other free money available through your state, So
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  Speaker 3: you want to make sure you can take advantage of that.