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One of the most prominent voices in personal finance has a lot to say about the Trump accounts being introduced by President Donald Trump.
In fact, money expert Dave Ramsey said parents and caregivers should think twice before using these accounts.
What are Trump accounts?
The Trump Account is a tax-advantaged investment account in the United States for children under the age of 18 who have a valid Social Security number. Accounts for children born in 2025 to 2028 will be funded with a lump sum initial deposit of $1,000.
According to the government’s website for the accounts, they are designed to help “advance the American dream” and create “long-term financial security for millions of children.”
What does Ramsey say?
Speaking of Trump’s accounts tiktok account“They’re not as revolutionary as Roth IRAs. They’re not at the 529 level. It seems more like a political stunt than a wealth-building success,” Ramsey said.
According to Ramsey, many people consider these accounts less revolutionary than established financial tools like Roth IRAs and 529 plans. “In fact, they appear to be more concerned with political theatrics than practical financial solutions,” he said. “Existing wealth-building tools, such as the Roth IRA, are proven pathways to enhancing personal finances, offering tax benefits and flexible contributions.”
Ramsey further says that Trump accounts “may simply serve as a distraction or marketing tactic, designed to draw attention to currency in the political arena rather than providing any real financial benefit.”
What are other options worth considering?
Having said all this, a ramsey solution The article advises parents and caregivers to open a Trump account, claim the initial deposit, and then invest in other options that may offer more choices and better tax benefits, such as 529 plans and other custodial accounts.
Editor’s note on political coverage: GOBankingRates is non-partisan and strives to objectively cover all aspects of the economy and offer balanced reporting on politically focused finance stories. You can find more coverage on this topic here GOBankingRates.com.