When it comes to our KIDS, what won’t we do?! Trump Accounts, 529s and Roth IRAs 

Six Things You Should Know

1. Equity Markets – were mixed this week with U.S. stocks (S&P 500) down -0.59% while international stocks (EAFE) were up +0.08%.
2. Fixed Income Markets – were down this week with investment grade bonds (AGG) falling -0.75% and high yield bonds (JNK) declining -0.63%.
3. U.S./Iran War – hostilities intensified this week, with continued U.S. strikes on Iranian military targets and retaliatory Iranian attacks on American positions across the Gulf. With ceasefire efforts stalled and disruptions spreading across the Strait of Hormuz and Red Sea, the conflict is sustaining upward pressure on oil prices and broader market volatility.
4. Tariffs Return – The U.S. imposed new 10%–12.5% tariffs on imports from 60 trading partners, replacing expiring temporary levies, while separately announcing 50% duties on nearly $20 billion of Canadian goods. Announced exemptions for energy, fertilizers and USMCA-compliant products should help moderate the broader economic impact.
5. Cybersecurity Reminder – Scammers are increasingly using Remote Access Tools (RATs) along with phishing emails or texts to take control of devices like phones, tablets, and computers. Once installed, these tools can give cybercriminals access to sensitive information, including your Schwab accounts. These attacks can be hard to spot, so if something doesn’t feel right- like unusual account activity or suspicious messages- trust your instincts. If you sense suspicious activity, please call us immediately or report any concerns to Schwab at 800-515-2157. 
6. Key Insight – [VIDEO & ARTICLE] The “Trump Accounts” (tax deferred savings accounts for kids) are live. This week, we dig into a few options around saving for your kids including the newly established “Trump Accounts.” The pros and the cons!

Insights for Investors

By Ben Klündt

When it comes to our KIDS, what won’t we do?! Trump Accounts, 529s and Roth IRAs

Legacy and financial assistance: certainly, topics that come up in our office on the regular. Many times, these conversations center around projecting one’s estate value for tax planning reasons, considering some type of trust to benefit the family or the like, but most of these things are postmortem. Over the last 4-5 years or so, we’ve had a handful of changes in the law that affect our “kids” and how they/we can save for their future, today. In today’s Commentary, we’re doing to look at a few different options.  

Trump Accounts 

Let’s start with the newest option that became available July 4^th, 2026, which you can enroll your child in now. These certainly have some “government oversight” to them (we don’t manage these accounts and they’re government sponsored). What I love is that the guardian of the kiddo maintains control of the account and assets until the child is of legal age, 18, and they can then choose what to do with those proceeds at that time. 

Here’s the key highlights for the Trump Accounts:  

• Tax Advantaged Retirement accounts  

• Kids born between Jan. 1, 2025, and Dec 31, 2028, will receive $1,000 in their account, ALL kids under age 18 are eligible to open and contribute though. 

• Contributions can be made annually up to $5,000 per year and there is no “income requirement” like there is for a Roth IRA contribution. 

• The proceeds will be invested in a mix of US domiciled publicly traded companies available through the Trump Accounts app, which you can download.   

• At age 18 the account is available for eligible expenses like a first home purchase, school, or business start-up without penalty, ordinary income tax still applies. 

• At 18 the kiddo can roll the proceeds into a Traditional IRA. 

Whether you contribute annually to this type of account or just have a child that qualifies for the $1,000, I think it’s a solid way to get money into a tax deferred retirement account that has some level of flexibility to it, and the child can also get access to view the account and learn about some of the key fundamentals of investing. For more information on these accounts, including enrollment, see trumpaccounts.gov.  

529 College Savings Accounts 

The second option that I’ll touch on is 529 College Savings accounts. I know many folks weren’t huge fans of the 529 accounts because of the restrictions on them, and how they had to be used purely for “higher education expenses.” With the passing of both secure acts (1.0 and 2.0), we have seen these restrictions ease up. Like the Trump Accounts I’d throw these as “quasi-governmental.”   

Key pieces of a 529s:  

• Grows tax deferred and if used on qualifying expenses, the distributions can be tax free, big tax win– though you do not get a deduction on contributions federally. 

• 529s are state sponsored so it may make sense to contribute to those in your state if you have a state income tax. It may be wise to consult your CPA. 

• The investment options are more similar to that of a 401k Plan; there is a selection of mutual funds you can invest in, or you can opt for an age-based portfolio. 

• These accounts can now be used on K-12 education costs. 

• If there is money left over in the 529 and certain “hurdles” have been met, up to $35K can be converted to a Roth IRA for the benefit of the beneficiary of the 529. 

• 529s can be “super funded” meaning that you can use your annual exemption of $19k per person per year and get 5 years of gifts up front in one contribution. A gift tax return would likely need to be filed.  

• Gifts/contributions made to a 529 are OUTSIDE of one’s estate so the parent or grandparents maintains control and “owns” the account, but it is not includable in their estate 

I personally appreciate the expansion of how the 529 can be used. With rate at which we are seeing costs rise on higher education, it’s hard to know exactly what the outcome will be Some version of college cost reform, or supply and demand will certainly come into play when enrollment declines, and cost will have to drop. A 529 is an account that we at TEN Capital can help you establish and incorporate into your personal and family financial planning.  

Roth IRAS 

Who doesn’t love making money and not having to pay tax on it?! Anyone that makes money (and declares it!) has the option to put money into an IRA. Now, there are two types of IRAs, Traditional (pre-tax) and Roth (after-tax). When you’re younger with decades of accumulation and expect your income to rise (and therefore your annual tax bill), having Roth IRA money early on working for you is great. The Roth IRA can be a bit harder as the kid has to have earned income to be able to contribute and you can only contribute up to their earnings, so that can be a hurdle.  

Here are some of the key facts of a Roth IRA:  

• You can contribute up to $7,500 annually for a child, assuming they have $7,500 in earnings.  

• The parent or custodian will have control of the account until the minor reaches age of majority which is state dependent. (Custodial Roth IRA).  

• Can be opened with your financial advisor and any custodian (Charles Schwab, Fidelity, etc.)  

• While you can’t deduct your contributions, all contributions and decades of gains come out tax free!  

• There are NO income phase-outs for the kids’ Roth IRAs, while adults can’t contribute when their MAGI is above $242K, if you’re married filing jointly.  

• Kiddie Tax may apply to the child’s earnings, and they will need to file their own 1040 tax return. 

Yes, there is a handful or greater of complexities to the Roth IRA, but it can be an incredible tool to truly supercharge your child’s retirement. They can get our principal, but the rest will face a penalty until age 59.5. The biggest hurdle here may be getting your kiddo to earn $7,500, unless you are a business owner with a good accountant and some odd jobs to justify the child’s compensation. 

You may be wondering, “which one makes the most sense for me and my family” which is a common ask. Like all things in financial planning, it’s highly individualized. I think it’s important to determine what is the ultimate goal for the money and then work backwards. At TEN Capital, we are here to have these types of discussions with you and how it may affect your personal financial planning. 

I hope you found this interesting and if you have any questions please reach out to any of us and we’d be more than happy to help.  

Have a great weekend! 

Ben Klündt and the Team at TEN Capital 

Sources:

Trump accounts:  

• https://www.trumpaccounts.gov
• https://www.irs.gov/trumpaccounts

529s: 

• https://www.irs.gov/newsroom/529-plans-questions-and-answers

Roth IRAs:  

• https://www.irs.gov/retirement-plans/roth-iras
• https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

Data, Just the Data

• U.S. Jobless Claims – initial claims sharply fell by 22,000 last week to 187,000 despite expectations of an increase, marking the lowest weekly claim in 60 years. Continuing claims also moved lower by 2,000 to 1,796,000.
• U.K. Retail Sales – grew by 1% in June beating expectations of a 0.3% decrease. On an annualized basis sales are now up 4.2% year-over-year for the strongest growth since January.
• U.S. New Home Sales – increased by 1.6% in June to a seasonally adjusted annualized rate of 628,000 units. Median sales price came in at $398,300, down from $409,200 a year ago.
• Euro Area Manufacturing PMI – rose to 52.0 in July beating expectations and marking the steepest expansion in 3 months. The level of output also reached a 3-year high.