TRUMP Accounts 2.0 (Roth Conv. Potential)
Welcome to the fifth edition of The Fiduciary Guide, our monthly newsletter from Kinetic Wealth.
Our goal is simple: to share a little of what’s happening in our world, pass along planning insights that matter, and highlight ideas and resources we think are worth your time. We hope this becomes a useful and enjoyable touchpoint each month.
QUOTE: “Risk is what’s left when you think you’ve thought of everything.”
– Carl Richards
THE FIDUCIARY BRIEF
Many of our readers engaged with us on Trump Accounts following our introductory commentary on these new tools designed for minors. This is a follow up on Trump Account planning and advanced ways these accounts may be a good fit to consider in certain circumstances.
Three Potentially Smart Moves with Trump Accounts to Consider
By now, you've probably heard about Trump Accounts - the new children's savings accounts created by the One Big Beautiful Bill Act that opened for contributions on July 4, 2026. These accounts are essentially a custodial-style traditional IRA for minors, owned by the child but managed by an adult. Children born between January 1, 2025 and December 31, 2028 even receive a one-time $1,000 government seed contribution. Children in certain sections of the country may qualify for a $250 seed contribution by foundation donors.
But beyond the headline, there are three planning strategies worth knowing about.
1. A Starter Retirement Plan
Most retirement accounts require earned income to contribute. Trump Accounts don't. The primary practical advantage of a Trump Account over a custodial IRA is the ability to bypass the earned income limitation on contributions. That means parents, grandparents, and even family friends can contribute on a child's behalf from day one with no job required.
Contributions during the growth period are subject to a combined annual limit of $5,000 in 2026 (adjusted for inflation after 2027) and are not limited by the child's taxable compensation. Invest that consistently into a low-cost U.S. index fund, and the compounding effect over 18 years may be something worth considering.
Have you ever heard the old saying, “it’s not timing the market, it’s time in the market.” Imagine starting that clock as a child?
2. The Age-18 Roth Conversion Window
Here's where it gets really interesting, especially for those who’ve grown to appreciate the concept of Roth. Generally, no withdrawals can be made before age 18; after that, traditional IRA rules apply. But "traditional IRA rules" also means Roth conversion rules apply.
When a child turns 18 and likely has little or no income before a career takes off, they can convert the Trump Account to a Roth IRA, pay income tax at their presumably low tax rate, and then let the money grow tax-free forever with no required minimum distributions. That is a powerful combination with years of tax-deferred accumulation followed by a low-cost conversion into a vehicle which potentially never gets taxed again.
This window when a young adult has minimal income is often rare and brief. Planning ahead makes it count.
3. Business Owners: A Deductible Employee Benefit
If you own a business, there's a meaningful tax planning angle here. Employer contributions to Trump Accounts are a deductible business expense and are excluded from the employee's (who is the minor’s parent) taxable income under new IRC Section 128. Employers can contribute up to $2,500 annually to the Trump Account of an employee or their dependent, and the employer contribution counts toward the $5,000 annual limit.
For business owners who pay themselves W-2 wages, such as S-corporation owners, the provision may allow the business to fund their own children's accounts with pre-tax dollars, but the contribution must run through a written Trump Account Contribution Program (TACP) that meets nondiscrimination and notice rules which don’t unfairly favor owners, key employees, or highly-compensated personnel.
When done correctly, this strategy may be a business deduction that benefits your family and your team.
A few important notes: Personal contributions from parents and family members are not tax-deductible - only employer contributions through a qualifying TACP receive that treatment. Final IRS regulations are still forthcoming, so working with a qualified advisor before implementing the employer contribution strategy is wise.
These accounts are new, the rules are still being refined, and the potential opportunities are still being fully vetted and understood. As always, we're here to help you think it through.
ADVICE IN ACTION
When Trust Becomes a Weapon: Protecting Yourself from Today's Scams
Someone we care about recently lost a five-figure sum to a scammer posing as a government agent. The caller claimed their Social Security number had been stolen, and that sending money was the only way to protect themselves. It wasn't true. And they aren't alone.
Scams targeting everyday people, especially older Americans, are growing more sophisticated, more convincing, and more heartbreaking. We want to talk about it openly, because awareness is one of the most powerful forms of protection.
It's Not What It Used to Be
Today's scams aren't clunky emails from a foreign prince. They use AI-generated voices, spoofed phone numbers, and real-looking government seals and documents. Scammers study what feels familiar to you…your bank's logo, a government agency's name, even the voice of someone you love, and they use it to lower your guard.
Most scams begin with something unexpected: an urgent call, an email you didn't ask for, a pop-up warning on your screen. That urgency is intentional as panic is their tool.
More elaborate schemes build over time. A friendly caller checks in, earns your trust, then slowly escalates toward a request for money or personal information. By the time the ask comes, it feels completely reasonable.
What You Can Do
The most important thing? Slow down. Scammers count on you acting fast. A legitimate government agency, bank, or business will never punish you for taking 24 hours to verify something. If someone pressures you to act right now, that's your signal to stop.
Bring someone you trust into big financial decisions. A spouse, adult child, trusted advisor - anyone who can offer a second set of eyes. Isolation is part of the scam. Community is part of your protection.
A few practical safeguards worth implementing:
- Set up transaction and fraud alerts with your bank and credit bureaus
- Never wire money or buy gift cards at someone's request
- Hang up and call back using a number you find independently
- Use multi-factor authentication on financial accounts
If It Happens
Report it. The FTC accepts reports at ReportFraud.ftc.gov. Contact your financial institution immediately. The sooner you act, the better your chances of recovery. And please: don't carry shame in silence. These scams are designed by professionals. Falling for one doesn't reflect your intelligence; it reflects their sophistication.
A Word from Us
Part of our role as your financial guide is helping you protect what you've worked so hard to build. Not just from market risk, but from threats like these. If something ever feels off, we're always a phone call away.
You deserve to move forward with confidence and peace of mind. Let's make sure you always have both.
WHAT WE’RE READING
Don’t Believe Everything You Think by Joseph Nguyen
The book teaches that excessive thinking is the root cause of all emotional suffering. Instead of treating every thought as absolute truth, readers should learn to separate automatic events from active analysis and embrace a quiet, peaceful state of present awareness.
Social Security Claiming Decisions by Avantis Investors Academic Perspectives contributor, Hal Hershfield, Ph.D
Social Security claiming decisions are about more than math - psychology and personal goals matter just as much if not more. Clients should consider that when to claim is part of a much bigger picture: their portfolio, tax plan, withdrawal strategy, and lifestyle. Rather than defaulting to a breakeven analysis, reframing the decision around what clients actually value can lead to a confident decision. The optimal age on paper may not be the right answer in real life. Read the full article here.
The Costliest Mistakes Even Experienced Investors Make Better Vantage by Vanguard
Even experienced investors make costly mistakes - and often, the problem isn’t the market, it’s behavior. In this episode of Better Vantage by Vanguard, Barry Ritholtz joins Joe Davis to break down the most common forms of investor misbehavior, from overconfidence and recency bias to chasing noise. They explore why these unforced errors can derail long term outcomes and share practical frameworks to help advisors and investors stay disciplined, humble, and focused on what really drives long term success. Watch the discussion here.
INSIDE KINETIC
Growing With Intention
Something exciting is happening at Kinetic Wealth - we're in the process of identifying and welcoming our first employee.
This is an important milestone in our journey. Growth for the sake of growth has never been our style. But advancement that allows us to serve you better, show up more fully, and extend the kind of thoughtful, personalized care you deserve? That’s what we’re after.
We've been encouraged by the feedback so many of you have shared along the way. Your words remind us why we do this work, and they've given us both the confidence and the motivation to take this next step.
We've had the privilege of connecting with several gifted candidates - kind, intelligent, and genuinely passionate about helping people. Not all of them will join us right away, but we believe each one crossed our path for a reason, and we're grateful for the process.
As we like to say: Here, savers become stewards. That applies to us, too. Healthy growth requires the same stewardship we strive to help you find. Stewardship to us is something that’s measured, intentional, and always in service of something greater than the bottom line.
We'll keep you updated as this chapter unfolds. We’re grateful you chose to be part of the journey.
CLOSING
Thank you for reading the fifth edition of The Fiduciary Guide.
Our hope is that this monthly note gives you something practical to think about, something helpful to learn, and a better sense of the values behind Kinetic Wealth. If a topic in this issue raises a question for you or your family, hit REPLY! We’d love to talk.
Warmly,
Kinetic Wealth