How The New 530A Trump Account Changes Long-Term Family Planning

We break down the new 530A Trump accounts and why they could change how families approach investing, ownership, and long-term planning. We compare the kids version to a 529 plan, explain key rules and limits, and share why starting early can build both wealth and financial literacy.

• why broader stock market ownership matters during an affordability crisis
• what the 530A Trump kids account is designed to do
• how the kids account compares with a 529 college savings plan
• how distributions are treated as income and what that changes
• contribution limits, employer contributions, and practical constraints for families with multiple kids
• the $1,000 government seed for eligible births and why compounding time matters
• how early investing can improve financial literacy before adulthood
• how to sign up through the IRS and why waiting can mean missed benefits

Schedule your free 20-minute consultation today by calling 423-247-1152 or by visiting BHretire.com. 
Take the first step toward making your financial dreams come true.

To learn more about B&H Wealth Strategies visit:
https://www.BHRetire.com
B&H Wealth Strategies 
423-247-1152 

Securities and advisory services offered through Silver Oak Securities, Inc., Member FINRA/SIPC. Silver Oak and B&H Wealth Strategies are not affiliated. http://www.finra.org/ http://www.sipc.org/

Transcript

Welcome And The Big New Account

SPEAKER_03 0:03

Welcome to the Four Seasons Podcast, brought to you by BH Wealth Strategies, serving Northeast Tennessee and Southwest Virginia since 1966. Here, we guide you through the ever-changing seasons of your financial journey, offering insights to help you grow, protect, and enjoy your wealth. Ready to turn your financial dreams into reality? Dare to dream. And now, here's your host, President of BH Wealth Strategy, Jeff Bingham.

SPEAKER_00 0:44

A major tax-advantaged account has entered the financial landscape and it's already reshaping how families think about long-term planning. Today we break down what it means, who it benefits, and how it could influence investment strategies moving forward. Welcome back, everybody. Skip Monty, co-host slash producer, back in the studio with president of BH Well Strategies, Mr. Jeff Bingham. And very fortunate to also have with us uh Mr. Jake Bingham, son of Jeff, and the next generation at BH Well Strategies, the two Jays, the flying J's. Guys, uh how's the week been?

SPEAKER_01 1:20

It's been great. Like I said, we've uh we've been busy and we're, you know, we're planning for our clients' futures while we are planning for our for the future of this business, as you said, with Jake sitting beside me right here. So, you know, as he's uh gonna be more a part of these podcasts going forward. So not everybody out there that watches us is just has to see the old man's face and voice all the time. So that'll be a blessing for everybody out there that's watching.

SPEAKER_00 1:48

Very good. Well, we're thrilled to have you, Jake. Um, and I hope you didn't mind the flying Jake comment. I I kind of like that. So uh so let's dive in. Today's topic is is uh the new 530A Trump account and your perspective on how it impacts future investment. Jeff, open the floor to you.

SPEAKER_01 2:09

Take it away. Sure. Um so I assume the 530A, because I only know the tax code numbers. We're talking about the kids, the Trump kids accounts. Is this that's the first, is that the is that the

Why Market Ownership Matters

SPEAKER_01 2:20

number that you gave? Because there's two Trump accounts that are out there. You've got the kids accounts, which were rolled out under the big beautiful bill, and then there's the kind of the Trump IRA uh accounts that are part of it too. So those are for two separate. I think they're both really both are very good ideas, and I'll kind of share what I think about about the the the why of those and why it's important that they've been put into play. Um, because the thing that we hear most often out there with the affordability crisis and the fact that the rich keep getting richer and the poor keep getting poorer, so to speak, is that's kind of been the mantra that's that's certainly in the in the uh the vocabulary of everybody out there, kind of in the public consciousness, if you will, is that and that, you know, I don't know, it's give or take off of this won't be exactly the right number, but probably 50% or more of the of the public out there doesn't have any ownership in the stock market. So when Wall Street's doing well and Main Street keeps, you know, kind of getting left out of, or as we like to say, Center Street, this is a way uh to begin to let those that have not had exposure, you know, to Wall Street, to the stock market, uh to participate in the growing of wealth and understanding what the ownership in the corporations and the companies, kind of the lifeblood of this country going forward is. So I think from that perspective, it's just a great idea to get more people involved and kind of not literally bought into this country, right? I mean, that's I think that's really the idea of this, is that to get ownership for everybody in these in these assets that have been going up and inflating in value over time. Uh while while those that don't own them are just watching inflation chew away at their purchasing power and not seeing their assets, their their net worth, you know, inflate as well, right, to keep up. And this is where that changes that. So the Trump kids accounts um, you know, are are a way to get uh you know kids, kids involved in it, you know, from a very young age and if you, you know, from from birth, if if if they cho if they sign up and they get involved in them. And the amount of wealth that can be created by starting early and funding often is just phenomenal of what kind of wealth can be created. And I think Jake's got some of the particulars on that. But like I said, from a high-level perspective, and we'll talk a bit about the Trump IRA accounts perhaps here in a few minutes, time permitting. Again, I think it's another great opportunity because again, we'll get the kids involved now, you know, where we can fund from birth to age 18, excuse me, and then those that are in the workplace that don't have access to a 401k plan, that don't have necessarily the funds to fund these types of plans, et cetera. You know, we can just get more ownership in the wealth creation, you know, vehicle that is the stock, the U.S. stock market, the best performing asset to grow wealth that any country in the world at any time in civilization has ever seen. That's what the U.S. stock market is. Um, you know, we talk about all the problems, but man, entrepreneurial ship, the innovation of American people and corporations is where you want to have some money involved and the wealth that can be created out of that. So Jake's got some of the details on that, so I'll let you kind of ask him some questions and I'll turn the uh turn the mic over to you guys.

SPEAKER_00 5:51

Okay. Well, what um you there's two different accounts we're talking about here. You said a kid account and the what was the other one?

SPEAKER_01 5:59

The Trump IRAs or the you know, a term Trump retirement account, let's say.

SPEAKER_00 6:04

Trump retirement, okay. A retirement account. So how do these, and and maybe it's not uh uh appropriate to talk about both of them

Kids Trump Account Versus 529

SPEAKER_00 6:12

in the same swipe, but how do these accounts compare to existing tax advantage vehicles that people may be familiar with, like a 401k?

SPEAKER_02 6:21

Well, talking about the the one for kids under 18, for the that account, you know, they you would compare it to the 529 plan that saves for college. This the Trump account is more of an IRA style. Um it gives the kids a chance to let their money grow, see it grow until they are 18. Uh their parents are their custodian, and they can take ownership over at 18. The difference between the 529 plan when they turn 18 is you can take that money out tax-free to use for college. The distributions out of the Trump accounts will be counted as income. So that's a difference. Uh is once for college and ones more suited for keep it to their retirement. It's a retirement like vehicle.

SPEAKER_00 7:10

Very good. Very good. Well, are there any limitations, or that's actually one is is you have to count it as income, but are there any other limitations

Taxes, Withdrawals, And Real-World Uses

SPEAKER_00 7:18

or misconceptions that investors should be aware of early on?

SPEAKER_02 7:22

You have a $5,000 contribution a year. Uh your employer can contribute and it counts against the $5,000 limit of $2,500. Um and that is not per child, that's per uh employee. So if you have two kids, uh you can't give two thousand five hundred to each. It's you would have to split that up.

SPEAKER_01 7:44

And let me let me add let me add a little bit to it. Also, I I think what's important too is that they're, you know, and this is this is limited, but any child born on from January 1st, uh, 2025 until December 31st, 2028, gets $1,000 contributed uh to the kid, the Trump kids account for for their future right there. So Darren, and whether or not, and that's our that's pre-funded, that was part of the big beautiful bill where this this account came, but that that that thousand dollars from the government, you know, seeding it right off the bat, that doesn't count against the five thousand dollars either. So, so those kids that are born in in this four in that four-year time span, right? Producer the you know, the years of the Trump administration, let's say, that are there. We'll see what happens, you know, with the next, with the next Congress, with the next administration that comes in place, whether that'll be extended or not, you know, for kids being born. But um, but it's and there are also exceptions to where uh that Jake was talking about, where it's thought of as a as a longer-term retirement again. But there are exceptions that can be used for college whether where there wouldn't be you know 10% tax penalties and various things. So there are ways in which this money can be used for first-time home purchases. There's some limitation on how much and all those kind of things, but there are ways to use this and not have to hold it and you know from you know from birth until you know until retirement at and through age 59 and a half, which is kind of the age limit that we use for all types of retirement accounts, let's say, without 10% tax penalty. It's kind of an arbitrary number, but that's the number that we use and have since

Contribution Limits And The $1,000 Seed

SPEAKER_01 9:22

I've been in this business. So, you know, there but there it's just a way for, you know, again, for kids and parents to be able to help fund their kids' future. Uh, and again, we're not, you know, again, we a lot of we could have a long conversation about college and the necessity of it to not who needs to go to college, who didn't, all those kind of things. So it's an expansion of of really the idea of every kid must go to college, idea that we had when 529s, you know, and education IRAs, coverdales and and the like were some of the names that were there. That, you know, this is an extension of that that doesn't have to just be used for strictly for education to have its tax advantages. This is more of a long-term, the child has ownership of this at 18 and can use it in a way that benefits their long-term future, whether that be education or not. Sorry, but that's that's I think some of the big differences that are there.

SPEAKER_00 10:21

Awesome. Well, does this open up any long-term planning opportunities that didn't exist before?

SPEAKER_01 10:29

I think, you know, and I'm I'm not trying to steal this away from Jake. I I think I think what it does, I don't know that it's a good question as I stand around to try to answer it. I don't know that it opens up any new opportunities. And maybe when I say this, maybe this is an opportunity. What it does is that you're gonna have kids at a much younger age, right, that are gonna start paying attention to how money actually works, how compounding and and money over time, adding money to accounts, they're gonna see that, you know, and and that is, you know, and hopefully that will not only will they they feel like they're participating in a world that sometimes they feel like they're being left behind, right? So all of a sudden, I mean, a kid that has that has this funded through through his age 18, right? All of a sudden, you know, if you think about how much money that could be, and it could be tens of thousands of dollars, it could be a hundred thousand dollar, you know, plus a hundred thousand dollar plus. I mean, Jay probably has some of the math on that that that they can just, I mean, they don't feel like they're poor, right? And as they go in and leave the nest from home and journey out into the world. So I think it it creates that. And so what that opportunity then begins to create is that now what can I do now? I've got this account. You know, what what other what else can I do when I get my job in the 401k plan? Or if I don't have a 401k plan, I can invest on my own because now I understand how money works. And I understand by investing in the US economy that I'm actually, you know, I'm actually seeing my net worth increase while the prices at the grocery store and at the pump and all those things are going to continue on buying homes, right? As we talk about the affordability crisis, I've got a pot of money over here that's being created. I can continue to let it grow and I can create new wealth through new vehicles that I understand a lot more now. So my education about money and investing has grown throughout my, you know, probably more as you get to be a teenager into high school. But all of a sudden you don't just get thrown out into the I'm 18 or 20 years old. How does the world work from a financial perspective? I think it has an opportunity to start educating kids at a much younger age to be, you know, financially literate.

SPEAKER_02 12:45

If you look at

Compounding Math And Financial Literacy

SPEAKER_02 12:46

the uh Trump account website where you go and sign up, they estimate based on historical returns of how this money can be invested, which is low cost, ETFs or mutual funds and the SP 500 is that that $1,000 seed money when the kids reach 18 could be $51,000. And that's without any contributions.

SPEAKER_00 13:19

Wow. What what an opportunity uh for for kids. I've my grandkid uh is is one of the beneficiaries. He was born in January.

SPEAKER_02 13:26

So Oh, that's right.

SPEAKER_00 13:27

There you go.

SPEAKER_02 13:28

Have you signed him? Has he been signed up?

SPEAKER_00 13:31

Oh yes, oh yes, absolutely, absolutely. There you go. Speaking of that, uh Jake, what we'll let you wrap up. What steps should someone take now if they're considering incorporating

How To Sign Up And Next Steps

SPEAKER_00 13:40

one of these plans uh into their financial any anybody that is eligible should go and sign up.

SPEAKER_02 13:48

You can sign up with IRS form, I can't think of it or the number right now, or you can go to Trump, the IRS website and sign up. Just need to go on online, sign into your IRS account, and you should you can do it.

SPEAKER_01 14:03

And everybody, everybody that that is is eligible for any of these accounts that we're talking about needs to be paying attention to this, be made aware of it, and go sign up because you're leaving money literally on the table if you don't do it, right? I mean, that's whether we're talking about the kids' accounts as they're born within this time this time span, but also the Trump is as this gets rolled out and that becomes eligible to sign up for the Trump IRAs, the Trump retirement accounts. If you're eligible, and there's income limitations and those kind of things we hadn't talked about, but you need to go get those set up and established because you you want and you know, it's in in a sense, it's free money. It's like your 401k plan. If you got a match in your 401k plan, you want to add money to the match and uh to make sure you're getting that free money, right? That match money. Because that's you know, that's return, whatever's being put in there, that's 100% return on your money by the day it goes in. So sign up to what sign up today.

SPEAKER_02 15:07

It's IRS for 4547.

SPEAKER_00 15:10

4547. IRS for 4547. Very good. Jake, Jeff, thank you guys so much uh for for uh clearing this up for us today, and uh we'll look forward to seeing both you guys in the next episode. Thank you, Skip. Thank you, Skip.

Closing And Free Consultation Offer

SPEAKER_03 15:29

Thanks for tuning in to the Four Seasons Podcast, brought to you by BH Wealth Strategies, where your financial success is our priority. Schedule your free 20-minute consultation today by calling 423-247-1152 or by visiting bhretire.com. Take the first step toward making your financial dreams come true. Until next time, remember every season is the right season to plan for your future. Securities and Registered Investment Advisory Services offered through Silver Oak Securities, Inc. member FINRA SIPC, BH1 Strategies and Silver Oak Securities Inc. are not affiliated.