Gavin Newsom says you should open a Trump account for your kid. Here’s why
California Gov. Gavin Newsom has urged families to consider Trump accounts, a new tax-advantaged investment account for children, despite the program’s political branding.
TL;DR
- California Governor Gavin Newsom, a critic of Donald Trump, is encouraging families to open "Trump accounts" for their children.
- These accounts are tax-advantaged investment vehicles similar to the state's CalKIDS program.
- The Trump accounts allow tax-deferred growth, with funds accessible at age 18 for expenses like education, a first home, or retirement.
- Parents and relatives can contribute up to $5,000 annually per child, with potential employer contributions.
- The federal government will provide a $1,000 one-time deposit for children born during Trump's potential second term (2025-2028).
- Financial planners clarify that the former president does not financially benefit from these accounts, and funds are invested in market-tracking index funds.
- While useful, financial experts suggest prioritizing 529 plans over Trump accounts due to tax implications on withdrawals.