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Natalie Slagle  00:00

Should you listener open up a Trump account? Of course, it depends. First and foremost, are you taking care of yourself? Is your retirement set up? Are your expenses cared for? Are your savings adequate? If the answers are yes, then it's time to consider what type of account you should open for your kid, and the Trump account may be a valid one. Do welcome to Money Dates, the podcast that makes money conversations with your partner feel a little less taboo. I'm Natalie Sligal, a certified financial planner, and I'm joined by my husband and business partner, Dan Slagle, also a certified financial planner. Say hi, Dan.

Dan Slagle  00:40

Hello.

Natalie Slagle  00:41

In each episode we'll share honest stories and practical tips to help you and your partner feel more connected and confident on your financial journey. So, grab your drink, get comfortable, and join us for our money dates. Hello, Dan.

Dan Slagle  00:57

Hi, Natalie.

Natalie Slagle  00:59

It's just us. We're gonna get technical today. Are you ready for that? I

Dan Slagle  01:04

am ready. What are we getting technical about? Trump accounts. Oh,

Natalie Slagle  01:09

you mean the 530 A account? The 530 A account. Yes. What? What was it? You had a story that the client didn't want to call it a Trump account. They called it what they said, 'He who shall not be named, that is how the conversation went. They

Dan Slagle  01:28

first brought it up in a median, they were like, should we open one of the 530 a accounts, and I was like, what's a 530 a account, you mean 529 They're like, no, the 530 a named after our current president. Anyways, we don't want to get political on this podcast, but yeah, they referred to it the entire meeting as the 530 A account,

Natalie Slagle  01:48

530 A account. Well, regardless of where you stand politically, it is right for everyone to assess all of their options. We've had, we have lots of different blogs, and I think we've had even a separate con podcast episode about the different types of funding, so I want our listeners, our clients to know all of their options, what's available, and what they should take advantage of, and so it is our duty, or should I say, our fiduciary obligation to know the ins and outs of this new account that is coming your way in July. Actually, I believe this - we're recording early because we're on top of it now. By the time this recording comes out, I believe the accounts are going to be up and running, unless something crazy happens. So, here we go. Let's dive into Trump accounts. This is going to be a little bit more technical, but that's where the fun is, right, Dan?

Dan Slagle  02:44

Yeah, well, even before we get into it, I mean, because they're essentially going to be opened in July, right? Like, isn't the target date july 4?

Natalie Slagle  02:54

Yes, of course. What is it, our 250th anniversary?

Dan Slagle  02:58

Yeah,

Natalie Slagle  02:58

so yeah, it's celebratory that way, but you can still process the paperwork. Some folks have already filed the forms with their tax returns to open the account, or you can just go to the website to open the account as well. And so the process to open has started, but the actual account opening has not

Dan Slagle  03:19

right. And one of the options, as you, I believe, just said, is that you could fill out a form when you were filing your 2025 taxes to get the account opened, and really interesting stat is 5 million Trump accounts had already been opened by april 15 of 2026

Natalie Slagle  03:36

That's a lot,

Dan Slagle  03:37

that's crazy, that is a lot of accounts. You just wonder how, like, processing items like that will will take place with that many people, that much of an influx going into one type of new account.

Natalie Slagle  03:49

I'm sure there's a lot of non-believers that when it comes to the government and account administration, that it's all going to go smoothly, but I'm going to stay hopeful. You know, there's a lot of people, and even outside of political parties that are involved in this whole process, so 5 million, that's how that's, and that was april 15, so I'm sure that number has grown since then, and it will continue to grow pretty significantly, so we should just talk about what a Trump account is, or if, let's see, now I can't even remember the acronym, is not acronym, but the 530 A, that's what it is. Yeah,

Dan Slagle  04:25

530 A, yeah, that's that's like the IRS code for code,

Natalie Slagle  04:29

yeah, whatever you call it, code

Dan Slagle  04:31

ruling, whatever it may be. Anyways, let's get into it. So, a Trump account is just a new tax advantage investment account created specifically for American children, that's my TLDR, right? Like, and so these, these accounts are designed to have kids, like, give kids a head start on long-term financial growth. So, when we have sat down and looked at, you know, what is the outline of this account, what are some of the, you know, tax implications? Conditions, we'll get into the details later on. We like to think of it as like a hybrid between a children's savings program and a traditional IRA. So, again, like during childhood, the account grows tax deferred, meaning you don't pay tax on the investment gains year after year. However, the contributions do go in with post-tax dollars,

Natalie Slagle  05:25

right? So, you, you got the money from your paycheck, your paycheck dollars have already paid all the taxes on it, and so that's the money you're using to fund this account,

Dan Slagle  05:34

right? Right, which is different than a traditional pre-tax IRA, correct?

Natalie Slagle  05:40

Right, because that one you'll get the deduction for any money that went into the account, so you're not paying taxes on dollars that go into a pre-tax IRA, so big difference between, and there's reasons why we're picking on the pre-tax IRA, because, and that'll come later, but that's a difference here.

Dan Slagle  05:58

Yeah, so when the child turns 18, right? The account converts, I believe, automatically based on what we know into a traditional IRA.

Natalie Slagle  06:07

It's not automatic, so choice to.. I mean, it's crazy because this is all new, so maybe it changes, but as of now it can stay as a Trump account, or you can convert it, or I don't think it would be a conversion, be a transfer to which in our world those two words are very important to distinguish, but you could transfer it to an IRA, and you can also start converting it to a Roth, which there's a lot to talk about with that whole strategy too, because it's not all shiny, like I think a lot of people think, like, oh, we can, we can do this, and then do crazy Roth conversions, but there's a lot of caveats to that.

Dan Slagle  06:50

Yeah, okay, so it seems like the, you know, the main goal is pretty simple: it's get money working for children, like, as early as possible, right? Letting compounding growth do its thing right, which we all kind of know, at least when you're invested, what that means longer term. I think we should almost start at looking at like a comparison around like how does it compare to other accounts that exist for for children. Do you want to take a crack at that?

Natalie Slagle  07:15

Yes, so let's start with the plan that I would say is best when you know for sure you're going to have qualified education expenses, and that's going to be the 529 plan, because the 529 plan, we're going to have better tax advantages than the Trump account, but what the 529 plan also means is that we have a very specific set of expenses that we have to use it for, so the 529 plan, you're also funding that with post-tax dollars, so that is the same as the Trump account. However, the distributions of the account in the 529 plan, any investment earnings, you don't pay taxes on that if it's used for qualified education expenses. The Trump account is different, so any of your investment earnings that you haven't paid taxes on, which would be all of them, because you haven't, you know, it's the earnings in the account, there hasn't been any taxes assessed that you will pay taxes on when you do distributions from the account. The other thing is that these distributions from the Trump account are going to start way later, because remember this essentially turns into a retirement account for your child, so in order to avoid penalties and interest from the Trump account, no one's taking distributions until they're 59 and a half, there's obviously with so much of this, there's like disclaimer here, like, hey, there's something different about that rule here, and just like an IRA, there are some qualified distributions that avoid the penalty, like education costs and first time home purchase, so you can already see, like, this starts to get a little confusing, but with staying on the 529 plan versus the Trump account, if you know for sure, okay, this money is going to be set aside for and used and spent on education, it, the 529 is superior because we have the that additional layer of the tax free on the investment growth, and we don't have that on the Trump account, but again, I think what's hard for parents, especially the parents we work with, is they're not 100% sure how much of their money needs to be set aside for college education expenses, so that lack of flexibility is not so great on the 529 plan, whereas the Trump account, you can use it for whatever you want when you're six years old, kiddo, which I think is just.. anyways, that's kind of interesting,

Dan Slagle  09:49

interesting. Okay, so that's a 529 What about I think the next account that comes up for me is related to, you know, children and compounding growth. Long-term growth is like. How does it compare to a custodial account?

Natalie Slagle  10:02

Yeah, so the custodial account I like to think is the kids' brokerage account. So, again, same as the Trump account, we are funding, and same as the 529 we are funding it with post-tax dollars, so you've already paid taxes on that. And then it acts similar to a brokerage account, where you pay on the investment earnings. The nice thing about the brokerage or the custodial account for the kiddos is that you can use it whenever they don't have to be 18 for you to use it as long as you're using it for the benefit of the beneficiary which would be your child so that's the big win with the custodial accounts is the flexibility on the timing you don't have to wait till the kid's 59 and a half or 18 or 12, you can use it whenever, but just gives you access to the flexibility on what you use it for, and when you just don't have all the tax perks like you do in the Trump account in the 529 plan.

Dan Slagle  10:53

Got it? Got it. And then, what about, I guess, the other one that comes to mind for me as a Roth IRA?

Natalie Slagle  10:59

Yeah, because people will open Roth IRAs for their kids. This one's a little harder to open for the four children, because you have to have earned income, not you, the parent, but the child has to have earned income. So, this makes it a little less accessible, I suppose. The nice thing, though, with the Roth, again, you're putting money in post-tax, I guess. All all of these accounts are putting in with post tax dollars, at least you, as the, as the parent, or the, you know, I'm not talking about the employer, or the, there's other ways of getting money into these accounts, and we can talk about that, but the 529 plan, the custodial account, and the direct contributions to the Trump accounts are all made with post tax dollars. Now, the Roth IRA, all of the distributions, as long as they qualify, and all of that will be tax free. Where again, the Trump account, you have a mix with your distributions, you're going to have some post-tax dollars, some pre-tax dollars, so some of your distributions from the Trump account will be taxable with the Roth IRAs. They're not, but again, the big thing here is the kid has to have earned income. Our child is almost two, she's not going to have earned income for a long time. So I'm missing out on that opportunity on the Roth, so I could open a Trump account simply because she doesn't have earned income, and all these other reasons. So again, pros, pros and cons,

Dan Slagle  12:19

pros and cons. So it sounds like you know, maybe there's a place for all of these accounts within a household, and there's not one like what we would call like one doesn't rank at like the top of the list, like in our opinion, right, there's a time and place for each type of account, depending on like every household specific situation,

Natalie Slagle  12:36

yeah, exactly, and and your beliefs and your philosophies, because we have households that are like, I'm only funding education, house retirement, potential wedding, like that's on you, kiddo. I'm only going to do education, and so if that's your belief, and you have a strong inkling that they will go to college, then it's the 529 is superior. So it's, it really comes down to your beliefs, your situation, your financial affordability, because if you only have five grand and you have all these different options, that would sway me on what I would recommend to a client based on how much they have, but if you have a lot of our families, they have a lot of money, and so they kind of want to sprinkle it across all of these different accounts, and there could be grandparents who want in on this as well. Sure, and so that's how we can kind of navigate this, but one thing, because I brought up grandparents, the Trump account has to be opened. There's like a not a formula, but a, an order, so if there is a parent, a living parent, that's the only person who can open a Trump account. If there is a guardian, that's the only person who can open a Trump account. So there's this order, I think it's parent, guardian, adult, sibling, grandparent, or something like that. It's so it's not like grandma and grandpa can open one for our daughter, plus us, it's there's only one that's going to be open for that kid, and it has to be open by that hierarchy of order of who's taking care of the kid.

Dan Slagle  14:11

Interesting, that's interesting. Well, can we take a step back, like outside of just like order for like who can open the account for the child? Like a question our listeners probably have is like, who qualifies for the Trump account, and like, from our standpoint, eligibility is straightforward. Wanna clarify that what I'm talking about now, who qualifies, is different than who qualifies for what you have seen in the headlines, and what most people only talk about is who qualifies for the $1,000 like federal seed deposit. So, first we're going to talk about, like, who qualifies for the account. So, in this instance, qualification means the child must be 17 years or younger on the last day of the year the account election is made. So, for example, for 2020-six elections, the child must have been born by this. Number 31st 2009

Natalie Slagle  15:03

That makes me feel old.

Dan Slagle  15:05

Yeah, yeah, it makes me feel old.

Natalie Slagle  15:07

Yeah. Anyways,

Dan Slagle  15:08

and that the child must have a valid social security number.

Natalie Slagle  15:12

Yeah,

Dan Slagle  15:13

so now let's get into who qualifies for the $1,000 federal seed deposit,

Natalie Slagle  15:20

which is different. Yes, which

Dan Slagle  15:22

is different.

Natalie Slagle  15:23

So, who qualifies for the $1,000 seed deposit? I'll tell you who doesn't qualify. Our daughter, womp womp. Okay, so if the child was born between January 1, 2025 and December 31 2028 that is who qualifies for the $1,000 seed deposit, I do think it's interesting. This is actually very similar to Trump's presidency, his second term timeline, so like that's it. If you were born in that timeline, you get it. If you weren't, then you don't get it. So, as of, we talked about how there's been 5 million people since april 15 who have submitted their requests for the Trump account, and now of that 5,000,001 point 2 million families have already claimed this seed contribution. So, good on you, families, go get your money. I have a strong recommendation for folks that if you qualify, put your hat in the ring. You should absolutely open an account, get the money. There's some wonky things going on with estate taxes, and some people might say, like, it is not worth the state tax reporting. And I'm getting into the weeds here a bit. I'll list those states in a little bit, but I just think, like, if you qualify, it could be a nice way to get 1000 bucks for your kid. That's my thought. That's not a true recommendation. Hey, disclaimer, disclaimer, I'm not your financial planner. Maybe I am if you're actually a client, but that's just what I think. That's what I think. That's my Natalie opinion, not my Natalie CFP opinion. Get off your

Dan Slagle  17:01

soapbox. Like, okay. Anyway, so we've talked about who qualifies, who qualifies in general, who qualifies for the seed deposit. Let's talk about if you want to move forward. What are the steps to do so? So, how to open up a Trump account. So, there are three ways to register, at least from our knowledge. Option one would have been two, and I say would have been because we're past kind of the deadline for most people. File IRS Form 4547 4547 with your 2025 tax return. So this was the most common method used by families who opened up the accounts by the april 15 deadline. Remember, we talked about 5 million people have already taken advantage of this, that's likely where that came from. So, form 4547 officially titled the Trump account election, is included with your federal tax return. But again, of course, now that the tax deadline is behind us, for those who at least did not file for an extension, this option is really no longer available.

Natalie Slagle  18:02

Yes, yes. Well, first with option one, we actually had a few clients do that. Option one, they, they let us know that they did it in all as well. Option two, Dan, surprise, I didn't want to tell you this until on the podcast, but I opened our daughter a Trump account.

Dan Slagle  18:16

Okay, just hit me with surprises here, even though she doesn't qualify for the $1,000 like, deposit,

Natalie Slagle  18:24

Dan, this is research and development, so I did it because I was like, okay, you go to this website and you like, what is the experience like? I need to talk about it on the podcast, so I'm just gonna do it.

Dan Slagle  18:35

I love how you talk about it on the podcast, your overall experience, and you haven't even shared it with me up to this point, this is a common theme of most episodes we have lately.

Natalie Slagle  18:44

I gotta make these juicy, and the juiciest thing I can do is surprise you that I opened a Trump account without consulting with you.

Dan Slagle  18:52

Surprise, I also opened up a Trump account for her.

Natalie Slagle  18:55

Did you actually?

Dan Slagle  18:56

No. Okay, we're

Natalie Slagle  18:58

not supposed to do that. Okay. Anyway, so Trump accounts.gov that's website. There is a green button that says get started. I literally did all this yesterday again because I wanted to talk about it, but from there, what I was surprised at, which I didn't think was very well communicated, was that it took me to the id.me plus IRS login, and I hadn't created the id.me login yet, so I had to do that, and when I did that, it required a form of identification, so I had to upload my driver's license, I had to take one of those video selfies. I feel like we had to do this when we went to Europe and got that ETA, like it kind of felt like that, like a passport kind of thing, but anyway, so I had to make that account with the IRS first, and then it allowed me to make my Trump account, and it asked for our daughter's social security number, so make sure you have that ready when you go to Trump accounts.gov and then it asked for her date of birth, and so right away it was like. Whoops, sorry, you don't qualify for the $1,000 and then you know you check a box saying everything is accurate, and I'm the person who can open the account, because remember, folks, you can only open it if you are in that order, so parents are the ones that need to open it. So it didn't take me long, it took me less than like five minutes, so it was pretty easy, that's all I got. I just wanted to touch cool. I'm glad I'm glad

Dan Slagle  20:24

it was easy for you to open an account without talking to me about it. Okay, option three, we talked a little, or I talked about the form 4547 It's not too late to do that, actually. At least it was if you filed your taxes and wanted to include the form with it, but you can also mail that form in independently of your tax return, so one important note with that, while you can register now, contributions won't actually be accepted until july 4, so the registration of like the account and the funding, two separate steps, so keep that in mind, so now that we've talked about opening the accounts, let's talk about how much can be contributed to the accounts.

Natalie Slagle  21:06

Yeah, so this gets really funky, like these - we're going to get into some of the like funky rules here of the account. So the total contribution, it, I think of it like an HSA, because remember when you have your HSA, there's this max dollar amount, and that max dollar amount is between you and your employer, so you have to figure out, well, how much is my employer doing, because then I can do the rest. So it acts like that, where it's $5,000 per year, and I believe starting in 2028 maybe next year, it's that number will inflate, but anyways, so $5,000 per year, and that will include all contributions between parents, grandparents, employers, because your employer can contribute, so the max is $5,000 a year, so exceptions to that is this $1,000 in seed money, so for 2026 if your kid qualified, you open an account, you'll get that $1,000 you can do another $5,000 on top of that. So that's kind of cool.

Dan Slagle  22:10

That is cool. That is cool. Well, you talked about how employers can contribute, right? So, according to our research up to this point, I think even what they say on the website is like there are following companies who have already stated their support with a Trump account. Do you know offhand, like, have they actually agreed to being like, we will offer this as a benefit to our employees?

Natalie Slagle  22:32

They're on the Trump account website, Trump accounts website, and they've stated their support, whatever that means. So, there's companies like BlackRock, MasterCard, SoFi, Schwab. There's more than that, and so, and my guess is there will continue to be more, but remember their contribution is a part of that $5,000 per year max contribution,

Dan Slagle  22:57

right? And in addition, I think you did some research on this, right. There's there's a few philanthropists out there who are also making contributions into certain people's accounts.

Natalie Slagle  23:07

Yes, so the big one that got a lot of news was the Michael and Susan Dell contribution, because I think they're, they're doing it's billions of dollars that they're putting forth, and so theirs is the first 25 million children aged 10 and under living in zip codes with median incomes below 150,000 So we're going to put a link, we're going to put a lot of links in this podcast, the links to open the Trump account, and then links to look up, does your zip code qualify? And I, of course, looked up our zip code, I'm like, hey, maybe I'm not going to get the 1000, but maybe I'll get the 250 Our zip code doesn't work, we don't qualify, but the zip code we lived in right before, or no, when we had, no, right before we had J, it did qualify. So I actually like our clients, I encourage, I'm going to encourage them to look to see if their zip code qualifies, because again there's 250 bucks, go get it, and then there's another one that's stated on the website, Ray and Barbara Dalio, but theirs isn't getting as much attention because their $250 donation per child is folks living in Connecticut with zip codes under 150,000 so there's actually specific rules on what type of who you can essentially discriminate against, and so it's not like these philanthropists can just make up any rule. There's actually guidelines on what they can do, and it's usually age and zip code and something like that. So,

Dan Slagle  24:38

got it?

Natalie Slagle  24:39

If you got a lot of money and you live in Oregon, you know. If you want to step up and do something specific for us, I wouldn't stop you.

Dan Slagle  24:48

Well, if that happens, we all know who the one person would be to make that contribution.

Natalie Slagle  24:54

I saw his name on a hospital that I was at yesterday. Anyways,

Dan Slagle  24:57

okay. All right. Well, okay. We've talked about, you know, who qualifies, how to open up the accounts, what the contribution will could potentially be up to. So, money's in the account now, like, again, barring all things go, all things going smoothly when this first launches. Let's talk a little bit about what do you do with the money in the account, right? I think that's really important to understand. So, my understanding from the research that I've done is Trump account investments are tightly regulated to keep things just like simple and focus more on long-term growth, and there are some specific guidelines in terms of like what funds must be invested in. Right, so when you put money into the account, assuming you do so, whether it's a seed contribution or maybe you do your own contributions, which we may tell you to do or not to do otherwise later on in this podcast, the money should not stay in cash. I'm just going to call that out. Usually, that's that's like could be a common problem that we see. Again, this is just like generic advice that I'm putting out there, but the options include, for once cash is in the account, broad US stock index mutual funds, or index funds. There can be no leveraged or industry-specific funds, or we're talking like very broad-based US-based index fund.

Natalie Slagle  26:19

Yeah, it can't be like US tech fund,

Dan Slagle  26:22

correct, even though, like, US tech might make up a portion of the stock index, right? Yeah, that's for, like, another podcast

Natalie Slagle  26:28

fund,

Dan Slagle  26:29

but not that specific one, right. And then the other caveat to it is, is it needs to be invested in, like, the fund funds available in the account need to be what we're going to call ultra low expense ratio fund, which generally means point 1% or less. So, again, for those of you who may not know, anytime you buy an index fund, whether it's an exchange traded fund or a mutual fund, there's typically what's called an expense ratio associated with buying into that fund. A lot of times, that's just like those are just admin costs passed on to, like, the fund company itself. We advocate for low index investing as well, but there are certain funds that exist that don't really follow those guidelines. So, at least within this type of investment vehicle, within the Trump account, the 538 account, whatever you want to call it, we're going to be investing specifically in low-cost funds, which is good at the end of the day, when we think about longer-term growth,

Natalie Slagle  27:26

right? Not good for people who don't love a higher risk, higher volatility. So, I don't love that part of it. However, maybe this is just a force of this is probably what's in the best interest of this of these dollars, especially if even if your kid's 17 and you're opening it and thinking they're not going to access it till they're 60, hopefully they don't.

Dan Slagle  27:46

Well, the other piece of it too, that we don't need to get fully into the investment conversation with with this topic, but there's like it has to be a US-based fund, correct? So we're talking no international exposure within a portfolio, and we're huge advocates of diversification across US and international markets, especially at the time of this podcast. International markets have outperformed the US markets over the last year and a half, so you're missing out on potential upside and diversification. But we can digress, and not again, we don't have to focus too much on the investments, but there are things to just be conscious of when you're thinking about how to set this up for longer term growth for for your child,

Natalie Slagle  28:25

right? Yeah, it's not going to be a big topic now, because no one can put more than you know, about five or $6,000 today, but in 20 years from now, the investment conversation is going to be really important when these balances are hundreds of 1000s of dollars.

Dan Slagle  28:37

Absolutely, let's shift gears into that. I know this is going to get you excited. The tax implications of Trump accounts, and I'll let you go officially on your soapbox.

Natalie Slagle  28:47

Okay, I watched a webinar that was for financial advisors, and it was over a half hour and a half long about Trump accounts, and so they went into the weeds with the taxes, and so I'm obviously not going to spend the next hour and a half talking about taxes with Trump accounts, but I'm just saying that because there's some high-level things that everyone should be aware of, and then it can get kind of funky when you start to go in the weeds. So that's my number one thing on the soap box during childhood, right? So when you're putting money into the account, remember those are after-tax dollars, so there's no deduction, and that means you've already paid taxes on it, but the investment growth has not had taxes paid on it, and so, and you don't have to pay taxes along the way, so that's called tax deferred, but then we're also going to have a mixture of these pre-tax employer contributions, if your employer participates, and then these, the seed funding, so there's going to be the investment growth, these pre-tax employer contributions, some of the seed funding that has never had taxes, and so when the money's taken out, you will have to pay taxes on that, so at withdrawal, I'm going to kind of repeat myself, because I think this can get this. Is where people can get confused, so the after-tax contributions, post-tax contributions, that's what you put in. You don't pay taxes on that money, but the pre-tax employer contributions, the investment earnings, you will pay ordinary income taxes. Okay, so not capital gains, ordinary income taxes. And remember, if you take money out before 59 and a half, you will also pay a 10% early withdrawal penalty. So, these accounts are not meant for your kids when they're 18, they're really designed for retirement. Now, there are penalty fee withdrawals. I already talked about that, so I won't get into it too much here. One thing that we're all kind of nervous about is, what is the reporting going to be like? Are the custodians going to be really on top of it? Are you going to be on top of it? Because we don't want to lose track of the basis, meaning the money that you've already paid taxes on, otherwise you're going to pay taxes twice on that money, and boy, that would stink, so we don't really know how this is going to shake out, but we do know that this is going to be a mix of post tax and pre tax, and so when you take the money out, it's going to be pro rata based on, you know, how much money is pre tax, how much is post tax, there's that, there are states that have stated they are going to tax the annual earnings on the Trump accounts. Now, I believe the earnings are is not the investment growth, I think it's the earnings, so like the dividends and interest, and those states are California, Hawaii, Kentucky, Massachusetts, Pennsylvania, South Carolina, and Wisconsin. So that makes me think, okay, so I'm going to have to pay taxes on these earnings, and remember they're saying in the account you're not taking that out because you can't take it out until for a long time. I'm going to pay taxes on that. What happens if I move to a state where I didn't pay taxes on it? And do I have to pay taxes then when I withdraw it, even though I already paid taxes when I lived in California, and they made me pay, like, to me, I'm like, I do not understand how this is going to actually play out. I'm sure there's much smarter people out there who've already figured that out, but this is one area that, at least when I was listening to the webinar, it was like, this is going to get complicated, even like the professional financial advisor webinar was like, yikes, here we go. So that's, I think, as far in the weeds as I'm going to get with the taxes around this account. It

Dan Slagle  32:29

sounds very complicated, and sounds like things could get really messy. So you just got to think about how you're going to keep track of all the post-tax contributions, the state taxable investment earnings, if your state, you know, is in that camp federal tax deferred investment earnings and pre-tax contributions, like that's just a lot to keep track of. So I'm hoping that there's either tax, better tax forms generated, there's going to be people who exist who likely will pay, like we'll have double taxation on this account, realistically, with all these requirements. It's just going to naturally happen.

Natalie Slagle  33:00

That could happen for sure. That's why it's like, if you qualify for $1,000 go get it with, if you're in one of those states that I stated, I could see why you pump the brakes a little bit, because it's, it's going to get complicated.

Dan Slagle  33:14

Yeah, let's talk about some unknowns with the account.

Natalie Slagle  33:17

Okay, so some unknowns with the accounts are gift tax filing requirements, so there's some people who say that hey, maybe this actually doesn't count towards the exclusion, so everybody gets a gift tax exclusion, and maybe this doesn't count because there's there's not a present interest, again, that's we're getting a little too detailed here, but if you had to file a gift tax return for every contribution, that would be another icky part, so I hope that gets ironed out, and we don't have to, or this will qualify as a gift tax exclusion, so that we got to figure that out. The fund custody details, so like, which private institutions will be approved to serve as the custodians. We've heard about the Bank of New York Mellon and Robin Hood, but there could be other private institutions that, that come into play, and I hope so, because our clients are, you know, have experience with a lot of different custodians.

Dan Slagle  34:12

Yeah,

Natalie Slagle  34:12

and then, of course, the July 2020 the July 2026 So, right now, the rollout, like, as of this recording, we don't know how it's going to play out, and maybe by the time this airs, it's going to be like chaos, and the computers have all crashed, and I don't know, but I'm going to be really paying attention on july 4. I mean, I'm going to be eating a hot dog, so maybe july 5, july 6, I'm going to be seeing what's actually happening with these Trump accounts.

Dan Slagle  34:40

Nice. Do you have an annual hot dog on july 4? Is that like a tradition you have?

Natalie Slagle  34:46

You know the answer is no to that.

Dan Slagle  34:47

Wow, how much more American can your Fourth of July get? A hot dog Trump account. Gosh, I can't wait.

Natalie Slagle  34:56

Happy birthday, America!

Dan Slagle  34:58

Sarcasm

Natalie Slagle  34:59

is. So let's just end this with this. Should you listener open up a Trump account? Of course, it depends. First and foremost, are you taking care of yourself? Is your retirement set up? Are your expenses cared for? Are your savings adequate? If the answers are yes, then it's time to consider what type of account you should open for your kid, and the Trump account may be a valid one if your answer is no, like I maybe I should be contributing more, or I actually need to take care of my parents before I take care of my kids. The thing that I don't like about this account is I feel like parents of our generation are like, oh, I'm responsible for my kids' retirement. I'm like, no, no, no, no, you are not. You could have all the money in the world and still say I'm not saving a dime in any of these accounts, and that's okay. It is your choice. It is not your responsibility. Yes, there's some tax benefits and investment growth, but, like, I, I just don't want there to be any shame for those who aren't opening these accounts.

Dan Slagle  35:59

Yeah, yeah, absolutely. I think it, if your child qualifies for the $1,000 and I think the answer is going to be more of a yes than the not

Natalie Slagle  36:07

yes.

Dan Slagle  36:08

But apparently, even if your child doesn't receive the 1000 some people still may open up an account, even though they don't contribute to the account, nudge, nudge,

Natalie Slagle  36:16

and they don't tell their spouse about opening it. Wow,

Dan Slagle  36:20

living everything we preach against, I think, yeah, to your point, like, based on everything we've gone through, it's just like this is optional at the end of the day, and really you just need to see how it fits into your financial life, and like, if maybe a grandparent or someone wants to put away money for, like, your kids' wealth, like we're not going to let all of this get in the way of it at the end of the day, but I think, yeah, you just need to better understand your, as you just said, your personal situation, and if it is a priority to utilize this type of account, or if you have other aspirations of funding higher education, like maybe that's strictly it, or putting money into a brokerage account, but just like you're marking the funds for helping with tuition or like a future down payment, right? So you just need to think about more like what is truly like top of the line priorities for you as a household,

Natalie Slagle  37:11

exactly. And we have a whole blog on exactly what we talked about today, so go to our website, it'll be linked in the show notes, and you are going to be just as much of an expert on Trump accounts as we are, so happy birthday America.

Dan Slagle  37:28

You had a little America in at the end, nice. Yeah, well, thanks, Natalie. I appreciate you running through, especially explaining some of the tax craziness, along with with these accounts. So, I will see you at the dinner table.

Natalie Slagle  37:44

Thanks, Dan. Bye, bye,

Dan Slagle  37:46

bye. Hey, if you've enjoyed this episode and are looking for personalized financial guidance, schedule a free complimentary consultation using the link in the description below. Natalie and Dan Slagle are the founding partners of Fyooz Financial Planning, a registered investment advisor. The information provided in this podcast is for informational purposes only and should not be considered investment advice or a recommendation to buy or sell any securities. Investing involves risk, including the potential loss of principal advisory services are offered to clients or prospective clients where Fyooz Financial Planning and its representatives are properly licensed or exempt from licensure. For more information, including our disclosures, please visit our website at www dot Fyooz financial.com

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