A MAJOR update now means that Americans can receive $1,000 from the federal government for opening a so-called “MAGA account”.
You only need to meet three basic requirements to get the cash that’s designed to kick start a child’s financial future.
You only need to meet three basic requirements to get the cash that’s designed to kick start a child’s financial future[/caption]
President Donald Trump is working to secure the financial future of America’s next generation with the introduction of the “Trump Account”[/caption]
President Donald Trump is working to secure the financial future of America’s next generation with the introduction of the “Trump Account”.
His One Big, Beautiful Bill is to thank, creating an order to give kids $1,000 courtesy of the federal government.
Under the current pilot program, the Treasury will set up an account and deposit a one-time sum of $1,000 into it.
To qualify for this account, all you need to do is be a US citizen, have a Social Security number and be born between January 1, 2025 and December 31, 2028.
Money contributed to these accounts gets invested in the stock market.
There are some restrictions to a Trump Account, however.
For example, contributions are limited to $5,000 yearly before the account holder turns 18.
Contributions made before the child turns 18 must be made with after-tax dollars.
Employers can contribute up to $2,500 to accounts, which won’t count as income for the parents or children.
Any contributions made after the child’s 18th birthday will be subject to usual IRA rules and taxation.
The IRA contribution limit in 2025 is $7,000 for those under age 50, and withdrawal are taxed as income would be.
HOW DOES IT COMPARE TO OTHER ACCOUNTS?
Experts have said that a Trump Account behaves like a traditional IRA, with a few differences.
Namely, contributions made before the beneficiary’s 18th birth year aren’t deductible.
Also, there’s no earned income requirement to start.
How to contact your bank
WITH bank scams running rampent, it is important to know how to reach out to your bank without risking fraud.
There is of course the foolproof method of going to your bank in person, but you are likely going to be directed to a customer care phone line.
In order to ensure that you are contacting the bank, make sure to use a phone number given to you by the representative or off of the bank’s website.
Some banks also have online helplines that can securely connect you with a representative.
Conversely, if you think the bank is reaching out to you with an account issue – make sure to verify the concern by calling a bank contact that you know is legitimate.
Scammers commonly mascarade as bank representatives to steal information from frightened customers.
Something like a 529 plan also offers more flexibility for users when it comes to who can open an account and use the money.
With a 529, account holders can change beneficiaries, and contributions are typically set at a higher amount limit.
Contributions grow tax-free, and withdrawals are tax-free when made for qualifying expenses.
Robert Persichitte, a CFP in Arvada, Colorado, said: “If it’s free money, great. Take what you can get.”
But he also stressed that Roth IRAs and 529 accounts are likely the better options because they offer much better tax savings.
These alternatives also come with much higher contribution limits.
This would help you save up more money long term.
