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Congress created a brand new investment account for kids called Trump Accounts, and the questions from optometrists have been flowing in. In this episode, we break down exactly what these accounts are, how they work, who can contribute, and - most importantly - whether they actually add anything new to the lineup of options you already have for investing on behalf of your kids.

What You'll Learn

• What Trump Accounts are and how they work
• Who can contribute, how much, and when
• How contributions are taxed (and why the after-tax structure matters)
• How employer contributions work - and potential hurdles for practice owners contributing to their own kids' accounts
• What happens when the child turns 18
• How Trump Accounts compare to existing options like UTMA/UGMA accounts, 529s, and custodial Roth IRAs
• The best use cases for ODs, including the $1,000 federal seed money and Roth conversion planning

Key Takeaway

Trump Accounts aren't a game-changer, but they can definitely be a benefit for our kids. The biggest win is the $1,000 seed money for eligible kids and the renewed attention on starting retirement savings early. They don't replace anything already in your toolkit - think of them as one more option alongside 529s, custodial accounts, and Roth IRAs.

Episode Chapters

• [00:00] Introduction
• [01:00] What are Trump Accounts?
• [02:00] When they're available and how to open one
• [02:30] Who can contribute and contribution limits
• [03:00] Why contributions are after-tax (and why that matters)
• [05:00] Employer contributions through your practice
• [06:00] Can practice owners contribute to their own kids' accounts?
• [07:30] Government and nonprofit contributions & the $1,000 pilot program
• [08:30] Investment options inside Trump Accounts
• [09:00] What happens when the child turns 18
• [10:00] Withdrawal restrictions and the ABLE account exception
• [10:30] How Trump Accounts compare to existing options for kids
• [14:30] Best use cases for optometrists
• [17:00] Final thoughts: The real positive of Trump Accounts

Resources Mentioned

• IRS Form 4547
• trumpaccounts.gov
• Submit podcast questions: www.optometrywealth.com/podcastquestion
• Contact: [email protected]

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The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.