Parents use Trump Account’s to create generational wealth for their children!
Goal – Fund the account with the intent of your child using the account for retirement.
-Contribute the maximum annual amount of $5,000 every year until age 18
-The account will grow to $196k assuming a 7.5% return
-Convert the account to a Roth IRA at age 18 (Child files a tax return)
-Cost basis of $90k and child reports $106k of income
-Net of tax amount converted to a Roth IRA $181k
-At age 60, the child will have $3,774,000 tax free assuming a 7.5% return
-This is how you build generational wealth for your child!
Trump Accounts offer tax deferred growth on earnings. Family contributions are made with after tax dollars, and eligible employer contributions may be excluded from the employee’s taxable income. A one time $1,000 federal contribution may be available for eligible children born between 2025 and 2028. Distributions are generally prohibited during the child's growth period and, once permitted, are taxable as ordinary income and may be subject to a 10% IRS early distribution penalty if taken before age 59½. Contribution limits and other restrictions apply, and some rules remain subject to future Treasury and IRS guidance. Consult a qualified tax advisor or financial professional before making decisions
This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing