{"id":525392,"date":"2026-03-09T21:55:09","date_gmt":"2026-03-09T21:55:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/525392\/"},"modified":"2026-03-09T21:55:09","modified_gmt":"2026-03-09T21:55:09","slug":"dave-ramsey-slams-trump-accounts-the-new-investment-accounts-for-babies-hes-advising-parents-to-take-the-1000-and-put-their-own-money-elsewhere","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/525392\/","title":{"rendered":"Dave Ramsey slams Trump Accounts, the new investment accounts for babies\u2014he\u2019s advising parents to take the $1,000 and put their own money elsewhere"},"content":{"rendered":"

American families are being offered a<\/a> $1,000 head start for their children\u2019s financial futures thanks to the U.S. president\u2019s newfound \u201cTrump Accounts.\u201d The savings plan has been exalted by some<\/a> as a favorable path to secure a six-figure nest egg for their kids, but personal finance expert Dave Ramsey<\/a> believes there are better ways to secure wealth.\u00a0<\/p>\n

\u201cWhile $1,000 offers a nice head start for children, Trump Accounts lack flexibility, restrict access, and limit your investment options,\u201d according to a post<\/a> from Ramsey\u2019s personal finance company, RamseySolutions.com.<\/p>\n

U.S. President Donald Trump introduced the savings mechanism within his broader One Big Beautiful Bill<\/a> last year. Even some business elite have gotten on board, with Michael and Susan Dell pledging $6.25 billion<\/a> to fund the accounts.\u00a0<\/p>\n

The plan entails that parents with babies born between the start of 2025 and the end of 2028 will receive a one-time payment of $1,000 from the U.S. Treasury into a tax-advantaged investment account. And starting this July, the parents of eligible kids (U.S. citizens with a Social Security number) under the age of 18 will be able to contribute up to $5,000 a year to their accounts.\u00a0<\/p>\n

Compounded over time, maximum contributions into Trump Accounts could accumulate as much as<\/a> $271,000 over 18 years, according<\/a> to a government website about the accounts.<\/p>\n

But by being drawn to the allure of a $1,000 deposit, parents may be overlooking better preexisting savings plans. Despite being a supporter<\/a> of the president, Ramsey dismissed Trump Accounts as a<\/a> \u201cpolitical stunt,\u201d and pointed out three red flags with the plan: The blog post noted that the account is unusable until kids are at least 18 years old, and when they do come of age, they\u2019ll still have to pay taxes on any investment growth. It\u2019s also restrictive around what they can use the money for, and limits investment choices because of the government\u2019s control, he pointed out.\u00a0<\/p>\n

\u201c[Trump Accounts are] not as revolutionary as the original Roth was. It\u2019s not as revolutionary as the 529 is. It\u2019s none of those things,\u201d Ramsey said on a recent episode of his<\/a> podcast, The Ramsey Show. \u201cYou can add to it, and family can add to it. But it\u2019s just [the] spreading around of money to get people\u2019s attention to a political office. I personally wouldn\u2019t do it.\u201d<\/p>\n

Fortune reached out to Ramsey Solutions for comment.\u00a0<\/p>\n

Ramsey\u2019s top savings plan picks for parents, over Trump Accounts<\/p>\n

Trump Accounts do have the potential to accumulate significant wealth, so long as families don\u2019t fall behind on contributing $5,000 yearly\u2014a tall order for many<\/a> American adults already dipping into their own<\/a> retirement funds. But the plan pales in comparison to the flexibility, tax benefits, and investment options of other savings modalities, Ramsey said.\u00a0<\/p>\n

\u201cIf your child is eligible for a Trump Account and that initial $1,000 deposit, go ahead and claim the thousand bucks. That\u2019s a no-brainer,\u201d the Ramsey Solutions post<\/a> continued. \u201cBut for ongoing investing, you\u2019ll likely get better results\u2026by using existing investment accounts like 529 plans, custodial accounts, or a custodial Roth IRA.\u201d<\/p>\n

For parents who opt into a 529 plan<\/a>\u2014geared toward their kids\u2019 college costs<\/a>\u2014earnings grow\u00a0 tax-free and withdrawals aren\u2019t hit by federal income tax.\u00a0<\/p>\n

Custodial accounts<\/a> like Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) are other options Ramsey recommended. For families planning ahead for their kids\u2019 big life expenses\u2014like a down payment on a home<\/a> or a wedding, the plans have no contribution limit and are much more flexible around investment options. The first $1,350 in earnings are also exempt from taxes, the Ramsey Solutions post explained.<\/p>\n

And when parents\u2019 toddlers grow up to be teenagers and take on part-time jobs<\/a>, Roth IRA<\/a>s become an incredibly powerful investment option. These young workers can put their earned income into the account, and they won\u2019t have to pay any taxes on the money they withdraw in retirement. And once they turn 18 or 21, depending on where they live in the U.S., all the funds are in their control.\u00a0<\/p>\n

\u201cTrump Accounts might seem like a good idea, but the more closely you look at them, the less appealing they become,\u201d the post said. \u201cWhen you make contributions to a Trump Account, you\u2019re basically trapping money inside an inflexible, unusable account.\u201d<\/p>\n