Preview of what we’ll cover today:

💰 Trump Accounts 101: What are they and how do they work?

🧾 Account Details: Rules, eligibility, and ownership

📈 Investment Choices: Comparing other savings vehicles

🛠️ Practical Steps: What parents should consider

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More About This Episode:

Trump Accounts are here, but are they really the best way to jump-start your child’s financial future? Ryan explains what these new 530A Trump Accounts are and how they stack up against other options. While the concept of teaching kids to invest early is powerful, Ryan questions whether these accounts are truly the most efficient tool for long-term planning. Before you rush to open one, find out if this is a savvy move or just overhyped “free money.”

Go Deeper Into The Episode:

0:00 – Intro

1:38 – What Are Trump Accounts?

3:23 – 529 vs Trump Accounts

4:32 – Who is eligible?

5:20 – Walter’s experience

7:24 – Is it worth it?

11:05 – Starting kids early

13:47 – Reach out to Ryan

Trump Accounts: The Pilot’s Preflight Briefing:

https://tinyurl.com/muwa6zrv

https://trumpaccounts.gov

Resources:

Retire Pilots – https://retirepilots.com

Get your FREE Retirement Toolkit – https://bit.ly/3ZmZsaX

Pilot Tax – https://pilot-tax.com/

The Pilot’s Advisor Podcast is also on video. Watch & Subscribe on YouTube: https://bit.ly/3EIEBW2

Connect with Pilot-Tax: https://pilot-tax.com/

Episode Transcription:

(Note, this is an automated transcription. Please forgive any errors.)

Walter Storholt 0:00
Welcome to the Pilot’s Advisor. Hey, it happened. My son got a $1,000 deposit into his Trump account on july 4, and so there it sits, the money ready to be used and added to. Perhaps we’re going to get the skinny today from Ryan Fleming, of course. The pilot’s advisor is going to go through what the Trump accounts are, what they mean, whether you should continue to invest in them and have them grow. Are they beneficial? Are they more of a waste of time? We’re gonna find out all the details with Ryan on today’s show, and find out about the fallout of these new Trump accounts. Did you get your $1,000 or not? We’re gonna talk about it coming up next. We’re back on the Pilots Advisor, Walter Storholt, as always alongside the Pilots Advisor himself, Ryan Fleming. Ryan, it is great to talk with you this week. I hope you had a great Fourth of July, as we’re recording this just after the holiday.

Speaker 1 0:53
Yeah, here we are. It’s six July, it’s Monday, back to work, great Fourth of July weekend, and just playing catch up, playing catch up, and I thought, why not talk about Trump accounts?

Walter Storholt 1:04
Yeah, well, the reason I mean, we’ve, we’ve known that these were coming, right, but now they are here, so kind of the bottom line, you know, high level view for you, the Trump accounts are for kids, they’re under the one big beautiful bill act from a, you know, a while back, kids born between 2025 and 2028 are the ones who get this seed deposit of $1,000 federal money, free money to the kids from the government, and you take that $1,000 and then we figure out what to do with it, and do we add to it, and that’s kind of what we’re going to get to the bottom of today. So, give us some more details into what this Trump account really is, and we’ll start to pick this thing apart.

Speaker 1 1:44
Yeah, so we’ve been asked about this a lot, and of course with no real guidance for a little while. And then we knew that they’re going to fund them on the fourth of July, and then of course I can’t open them for you. It actually takes you doing a little work, which then, of course, a lot of pilots are like, I don’t want to do work, so but unfortunately, I can’t. I can confirm

Walter Storholt 2:02
it didn’t take that much work, guys. So, and gals, you know, let’s, let’s not be that lazy, right? Yeah,

Speaker 1 2:08
so we’re going to tell you guys a little bit about it, give you a big picture. If your child qualifies for the free money, free money is free money. Outside of that, if they’re not going to get the $1,000 from the government, we’re going to talk about big picture, what makes sense, what might be a better investment vehicle, and go through the whole spiel for you guys. But today it’s about the Trump account. Walter told you a little bit about what it is. They’re actually formally calling it, and of course, we’re going to call them Trump accounts forever, no different than like Obamacare. It’s formally a 530 A account, so that’s the new, you know, we know about 529 and all that for saving for a kid’s college. Well, guess what these are called 530 days. Think of it as a traditional IRA for your, for your kids. So the money in there is after-tax dollars, and it’s going to grow for a long, long time, and you’ll pay tax on it, normal income tax, when you withdraw it. Your child owns the account as a custodian until they’re 18. You get to fly the airplane and decide how it’s going to be invested and how it’s going to be set up, and all that. And at 18, it basically transitions over to traditional IRA rules, over to the child once they’re not a, not a minor,

Walter Storholt 3:23
so 529 plan. The whole idea is kind of, you’re saving that money for, you know, their schooling and college education, for the most part. This is saying, all right, we’re actually going to start setting people up for retirement from birth, is the opportunity we’re creating here, but none of this money is really intended to be touched for 60 plus years, obviously, depending on when you’re putting that money in, but from this kind of initiation point here is kind of what we’re getting at, and I can’t take this $1,000 and go put it in the boat fund or anything like that, right? Ryan,

Speaker 1 3:54
no, you can’t, and I honestly, to be totally clear, I love the idea, I love what they’re trying to do, they’re trying to teach from a very young age, list investor money to get ready for retirement. The biggest factor is the time factor, introducing anyone to the benefits of investing in the market and capitalism, and how that money can grow over time. I don’t know what $1,000 will grow to, even if you put no money, no more money in there, it’ll be a significant amount by the time they’re 60, so I love the idea of it. I like it better than a 529 because it’s a little bit more. There has some flexibility, but they are two different animals. This is for retirement, not necessarily for kids’ college. But let’s talk about the details. So, who’s eligible? Okay, your child has to have a social security number. They must be under 18 years of age, as of December 30-first of the year that you open it, one account per child, no exceptions, and no income phase out. So, unlike the Roth IRA, it doesn’t matter how much is made, you can still do traditional IRA, just like a traditional IRA. See lots of it’s basically a traditional IRA. Right, so the only thing I really love about these is if you can get free money, okay? Yeah, free money from the government, and so that $1,000 seed money is – I like to say the only real reason to open one of these. So if you have a kid born between january 1, 2025 and december 31 2028 your kids are in that window now. Walter has a brand new son, for the most part. So, why don’t you just tell us about your experience?

Walter Storholt 5:26
It was pretty easy, you know. I went to Trump account.com Trump Account, yeah, not, not plural, but Trump account.com put in some basic information earlier on, before the launch of the program. They kept me updated via email of, like, the progress of it happening, and on july 4, they said, ‘Hey, here’s the $1,000 it’s been deposited into your account. So, again, relatively easy to sign up. Just took, you know, social security number for my son to be able to sign him up for it, and you know, establish this thing in his name. Kind of interesting. I’m looking at the portal back end right now, Ryan, just kind of checking it out, because it’s now finally starting to update a little bit, and from what I can tell, you know, we’re already at $1,001.09 so we’ve already got a, got a little bit of, got a little bit of something here. Now it says it’s automatically invested into S P Y M, an index fund that tracks the S and p5 100, it even shows you the top five holdings in that account, and you know the percentages of each one. So, Nvidia, Apple, Microsoft, Amazon, and Alphabet are those top fives. But you were talking about growth. It’s got a little button I just click at age of 18, and it automatically shows me the estimated value of 18. If I do nothing, it gives me a little slider, and it says at 18 it’ll be worth $3,280 If I do nothing, and then you can adjust that, obviously, at age 60, again adding nothing else to it, it estimates it would be at 61,000 approximately.

Speaker 1 6:58
Well, it’s still, it’s still amazing. And, of course, the idea here is you open them up and then actually do something with it. We will have a checklist attached to this episode. It’ll actually give you the website Trump accounts.gov where to go to, how you file that form 4547 and and the steps to go through that. However, big picture, big big picture. The only reason why I would really open up a Trump account is if your child qualifies for the $3,000 If they don’t qualify within those years, there’s a lot of other investment vehicles that we could use that I would prefer a traditional IRA treatment, like I said before, after tax, after tax dollars going in, and then you get taxed as ordinary income going out, so that’s tax deferral for 60 some years, and then you get swat, you hit with the tax,

Walter Storholt 7:54
and the parents not actually getting, you know, any sort of tax benefit on the front end, so it’s almost worse than a traditional IRA, where you could potentially take that. Yeah, you could

Speaker 1 8:04
potentially get a deduction going in. Now, most of our pilots don’t get a deduction, they can still contribute to a traditional IRA, but there’s no deduction at their income levels. But you got no tax-free treatment. So, as soon as I start hearing this, and we could do a whole nother podcast on that, I’d much rather do a custodial Roth IRA for a child. I’d much rather do some insurance policy where it’s growing tax free. There’s many, many other things that we could take after-tax dollars and have better track tax treatment and actually more flexibility on the back end. So take it for what it is. I mean, you’d be better off, honestly, putting the money into a traditional IRA each each year, and then converting it to Roth each year. You know, that’d be another thing with the traditional IRA. So, there’s a lot of other things that look at, you know, UTMA, UGMA accounts, completely flexible. Those, those are, of course, they’re not getting the tax deferred, and they’re not necessarily for retirement, but they could be treated as a retirement vehicle,

Walter Storholt 9:00
that would just be kind of like a brokerage account, essentially.

Speaker 1 9:03
Yeah, a brokerage account, or let you could open up a brokerage account in your name, ear market for the child, never ever take money out of it, and it could be a legacy planning vehicle as well. You got to do is die, you get a step up on a cost basis. So,

Walter Storholt 9:20
couple options, choose your path there. Yeah,

Speaker 1 9:23
we’re having a lot of fun with this today, but we wanted to at least talk about Trump accounts. We’re going to attach the steps to go ahead and open one out up if you so choose to open one of these, and you have a young child that qualifies. If you guys have any questions about it in general, we’re here to answer the questions of what we do know and how we can, and if you’re just looking to invest for your kids, whether it’s for college or retirement, let’s talk about some other options as well, because there are a lot of other options out there besides getting the free $1,000 and what you could do with that, I. On

Walter Storholt 10:00
attention, aviators, when you’ve spent years in the cockpit managing the complexities of flight, isn’t it time you navigated your retirement with the same precision? Introducing Retire pilots.com right at your touchdown zone on our homepage, there’s a beacon flashing get my free toolkit, click that, and you’ll be cleared for a direct route to Ryan’s retirement toolkit, tailor-made for pilots like you. Inside, you’ll find two of his important works: The Pilot’s Advisor and Pilots Retire Early. Between these two books, you can decipher the nine critical decisions when retiring before 65 and discover the seven lessons to help pilots land safely in retirement, but that’s not all. This toolkit is packed with altitude high value, including extras to get your retirement plans off the runway and light the afterburners on your 401 k. Vector on over to Retire pilots.com to grab your toolkit and let’s embark on this journey together. I do kind of view it a little bit of like it’s at least completing a little bit of this triangle, if you want to do something for for your youngsters, and so this is what that what we’ve essentially done, and how we’re viewing it is three areas of trying to save in a little bit of amounts for our son, so we have now a retirement solution, so whether we just leave the $1,000 in there, and you know, maybe it grows to that 60k at the, you know, in 60 years, or whatever the case may be, where if we add a little bit more to it, we’re saying, hey, here’s that seed money for your retirement, that’s giving you a little kick start, we’ve got a brokerage account under his name, a custodial account, and that is his teach him how to have fun and also learn about the stock market and about companies and investing, and I plan to introduce that one to him when he’s very young and let him make some investments and pick stocks. This is what my grandmother did for us, for us kids, when, when I was much younger, instead of gifting us toys and things like that, she gave us small amounts of stock growing up, and that’s what got me interested in finance and money, and that became seed money for my first house, which continues to, you know, be part of my financial story today, which is pretty cool, even in the small amounts that it was, it gave incredible power, so kind of the same thing, and then the third component, a 529 plan for education expenses, and so we’re kind of sprinkling into all three of those to kind of hit the three different triangles, so that’s kind of our thought process and our plan, but the lack of tax advantages and the quite amount of time that that money is locked up in the Trump accounts gives us a bit of that same pause that you’re bringing up for why maybe we just let that $1,000 ride and worry about it another day.

Speaker 1 12:47
Well, I think the key is I love the idea of it starting early, letting that,

Walter Storholt 12:52
yeah,

Speaker 1 12:52
letting that time factor work for you, and you know, just like you’re talking about, we got to get, we have to get better at educating people on personal finance on educating people about investing in the market prudently, not stock picking, Walter, that’s bad, but you know, anyway, but investing in the market, letting the money grow, I mean, it’s hard when you don’t understand it, but investing in the stock market is probably the greatest wealth creation tool of mankind, and the flexibility you can’t have it in any other investment, so take it for what it is, and let it, let it work for you. So, I love the idea of it. I’m glad, like I love the fact that that your son has one set up already. I think it’s amazing, and for those clients that do have newborns, and they’ll let past, you know, three years, let’s work on getting that set up.

Walter Storholt 13:42
Yeah, go get them the $1,000 if it’s available. Why not sign up for it? You bring up great points all throughout the show today, Ryan. Appreciate your perspective on all of that. And again, if you want to reach out and touch base with Ryan to talk a bit about your specific plans, or, hey, in this case, a plan for a child, and figuring that out, and how it fits into the puzzle. It’s all part of the conversation, it’s all part of planning, and you can reach out and set up a time to visit, as well as get your retirement toolkit specifically made for pilots who are thinking about finances and retirement, especially. All you have to do, of course, is go to Retire pilots.com and you can order the toolkit and get in touch with Ryan. It comes with a free portfolio analysis, where you get an in-depth look at your portfolio, your finances, where the gaps are, how you can improve moving forward. So, check all of that out again. We’ve got links in the description of today’s show for that, as well as this checklist, if you want to go check out more information about these Trump accounts as well. Recaps a lot about what we’ve talked about on the show today, so check that out as well. Ryan, thanks so much. Appreciate it.

Speaker 1 14:41
It was a short one, but I appreciate it. I hope everyone had a wonderful Fourth of July weekend. Happy birthday, America! It was a great time, and we live in the greatest country there is.

Walter Storholt 14:51
You got it. Happy 250 USA, awesome.

Speaker 1 14:54
252 50.

Walter Storholt 14:56
Ryan’s getting ready to go jump in the lake because he’s got family visiting and they’re all in the lake. Right now, so we’re gonna let him go, so he can go have some fun with family

Speaker 1 15:03
once again. Walter is always making me work.

Walter Storholt 15:05
Pulled him out of the lake to do a show, but now he’s heading back in. Thank you, sir. We’ll see you next week.

Speaker 1 15:11
Take care.

Speaker 2 15:16
This episode is for educational purposes only, and it’s not individualized investment advice. The Pilots Advisor LLC is an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Past performance is not indicative of future results, and investing involves risk, including the possible loss of principal.

Transcribed by https://otter.ai