Did your newborn just get a $1,000 head start?

If you have a baby (or one on the way) there’s something you might find surprising (and helpful)...

The new tax law now gives every child born between January 2025 and December 2028 their own special savings account. It’s being called the Trump Account, and here's what that means for your family:

• You (or someone else like grandparents or your employer) can contribute up to $5,000 a year, tax-deferred.

• The government chips in a $1,000 seed (no income limits and no application needed). It’s all automatic if your child’s born in the eligible window.

• The money grows in a basic U.S. stock index fund and isn’t available until your child hits 18. 

• When they turn 18, they can use the money for things like college, buying a home, or starting a business. Withdrawals later than that are TAXED like traditional IRAs.

Sounds nice, right? But here’s what’s WORTH thinking about:

• It’s not a replacement for a 529 or college savings plan. For education purposes, 529s still give TAX-FREE withdrawals and more flexibility.

• The account must stay put until age 18, and it’s only invested in one type of fund (all U.S. stocks). That means LESS CONTROL if you want something more conservative.

• And while $1,000 is a nice head start, it won’t cover everything. Your family will likely still need other saving tools for college or housing.

Bottom line:

This new account is a HELPFUL BONUS, especially since it’s automatic and tax-deferred. But it’s a SUPPLEMENT, not a full solution.

If you want to walk through how this fits into your bigger savings plan,

Call me at (702)325-4276

👉 Or click here and I’ll reach out to you.

Let’s make sure your family gets the BEST possible start without overcomplicating things.

That’s all for today!

More updates coming soon,

Kat Ching, Enrolled Agent