529s and Trump Accounts
My grandkids are too old to qualify for the $1,000 bonus on Trump Accounts. On Jul12th in the Chicago Tribune you wrote that, if you can afford it, there’s no reason not to have both 529 and Trump accounts. I don’t see why, if a child doesn’t qualify for the Trump Account bonus, there’s any good reason to open a Trump account when you can just put more money into a pre-existing 529 account. Would you please explain why opening a Trump account would be preferable to the alternative that I suggest? Thank you.
Terry Says
There are limits to how much money you can set aside for a child in a 529 college savings account. For example, the Illinois Bright Start plan accepts contributions until all account balances in Illinois’ 529 plans for the same beneficiary reach $550,000.
Admittedly that’s a high bar — but if you wanted to save more money to grow tax-deferred for a child, OR if you wanted the child to be able to use the money for other than college expenses without penalty, you might also open a Trump account.
But you’ve made a good point. I think the real benefit of these Trump accounts comes in the opening $1,000 gift for young children AND in the fact that many families will easily open this account to get the free money, while they might not be motivated enough to open a 529 plan.
