FREE NEWSLETTER
Go to main Forum page »
Just a short update on Trump Accounts. https://trumpaccounts.gov/
Myself, I wish they had named these “Ben Franklin” accounts, in honor of the first American, the Favorite Founder. 200+ years ago, Ben showed us how to do super long term investing.
Read: M. Meyer, Benjamin Franklin’s Last Bet, The Favorite Founder’s Divisive Death, Enduring Afterlife, and Blueprint for American Prosperity, 2022, Harper Collins
Beyond Ben
Not only will you want to investigate this opportunity. You will also want to prompt your employer to consider adding Trump Accounts to your employer’s IRC 125 cafeteria plan (pre-tax contributions for health and welfare benefits – medical, dental, vision, life, LTD, Health FSA, Dependent Day Care FSA, Health Savings Accounts).
Effectively, this treats your child’s Trump Account on much the same basis as a Health Savings Account – such as the ability to accumulate assets and use such savings as income in retirement (after age 65). Hopefully, guidance will confirm that the child, upon reaching age 18, will be able to convert to a Roth basis during periods when they are in a low marginal income tax bracket.
With a cafeteria plan deferral, money goes in pre-tax for Fed, State, FICA, FICA-Med, accumulates tax deferred, and while it is taxable as ordinary income after age 65, … the tax preferences are significant.
Because they are pre-tax for FICA and FICA-Med, it also provides the employer a modest financial incentive (typically, a 7.65% x contribution amount reduction in FICA and FICA-Med) from adding Trump Accounts as an eligible feature to their cafeteria plan.
Even if you are not interested, you can do your coworkers a favor by pitching Trump Accounts as an eligible option of your employer’s cafeteria plan. Not sure whether a cafeteria plan election would have to be limited to a child who you claim as a dependent for tax purposes (keep in mind that pre-tax cafeteria plan contributions are the same for children up to age 26 covered under your health plan – whether or not they are tax dependents).
Let’s go!
So, we don’t know if the Trump accounts will be able to be converted to a Roth at/after age 18? My prior understanding was that they would be convertible. That’s a huge selling point, so hopefully that gets clarified soon.
Today, 3/9/2026, initial proposed regulations were published in the federal register.
The summary reads as follows-
… proposed regulations relating to the Trump accounts contribution pilot program under which the Trump accounts of eligible children can receive $1,000 pilot program contributions. Eligible children must be U.S. citizens with valid Social Security numbers born in 2025 through 2028. The proposed regulations would provide guidance on making an election for the Trump account of an eligible child to receive a $1,000 pilot program contribution. The proposed regulations would affect eligible children and individuals who would make elections with respect to those children.
I also like the thought that naming the starter financial account for children in honor of Mr. Franklin would have been an appropriate tribute to the life Ben Franklin lived. I have read the book Benjamin Franklin’s Last Bet and did so online through my access at my local public library.
I feel I was following Benjamin Franklin’s guidance to save a penny by my reading through a public library, actually 899 pennies for the Kindle version before sales tax.
Consider doing a post on how Franklin’s bet turned out. How was he able to select investments that outpaced inflation?
He didn’t. He made bequests lasting 200 years to help working tradesmen. The loans were able to accumulate tax free and without management fees as the cities he left the bequests to had agreed to do so as a condition of receiving the bequests.
The summary from the book reads as follows –
Benjamin Franklin was not a gambling man. But at the end of his illustrious life, the Founder allowed himself a final wager on the survival of the United States: a gift of two thousand pounds to Boston and Philadelphia, to be lent out to tradesmen over the next two centuries to jump-start their careers. Each loan would be repaid with interest over ten years. If all went according to Franklin’s inventive scheme, the accrued final payout in 1991 would be a windfall.
Gotcha. I misunderstood what it was. I thought he left some lump sum with instructions to have it grow to be used in 200 years (or something like that).