The New Rules of Saving for Your Kids: Tax-Free Growth, FAFSA Hacks and the $1,000 Government Seed
Summary
Financial Sense advisors Crystal Culvert and Nick Kyle analyze the best strategies for saving for children in 2026, comparing 529 plans, UTMA accounts, custodial Roth IRAs, and the new Section 530A "Trump" accounts. They detail how expanded 529 rules now cover K-12 and homeschooling expenses, while explaining the mechanics of the Trump account, which offers a $1,000 federal seed and allows contributions without earned income. A key case study demonstrates how converting Trump account funds to a Roth IRA at age 18, combined with 529 rollovers, could potentially generate over $6 million in ta…
Topics discussed
Introduction: Saving for a child's future
2026 wealth landscape and four key priorities
529 plan evolution and expanded qualified expenses
529 tax benefits, funding limits, and state deductions
529 plans and FAFSA financial aid impact
Sponsorship and compliance disclaimer
529 rollovers to Roth IRAs and scholarship rules
UTMA/UGMA custodial accounts and their drawbacks
Custodial Roth IRAs for minors with earned income
Trump Accounts: Mechanics and $1,000 government seed
Trump Account contributions and employer matches
Trump Account investment rules and age 18 lockup
Strategy overview: Building Roth wealth via Trump accounts
Case study: Projecting $6M Roth IRA by age 59
Total contribution costs and sharing the burden
Potential risks: Early withdrawals and legislative changes
Conclusion and call to action
Final legal and financial disclaimers
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