George Kamel - The Millionaire Loophole Inside Trump Accounts

Episode Date: September 14, 2026

📊 Check out the Investment Calculator!   I recently discovered a loophole with Trump Accounts that can turn $34,000 into more than $7million for your child’s retirement. Allow me to explain.    Next Steps: • 🎥 Watch my video The 4 Accounts That Will Make You Rich (Are You Using Them?). • 💵 Start your free budget today. Download the EveryDollar app! • 📈 Are you on track with the Baby Steps? Get a free personalized plan.   Connect With Our Sponsors: • Go to Boost Mobile to switch today! • Get 20% off when you join DeleteMe. • Go to FAIRWINDS Credit Union for an exclusive account bundle! • Sign up with Privacy today and receive a $5 credit just for being a George Kamel fan.   Explore More From Ramsey Network: 🎙️ The Ramsey Show 🍸 Smart Money Happy Hour 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 📈 EntreLeadership   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

I was wrong. I was wrong about Trump accounts. Gotcha. Just the accounts. Everything else, I feel like I'm on the right side of history. You decide what part that is. Now I've made two videos on these Trump accounts already, and if you've watched either one, thank you. But you also know I was not the biggest fan. But I recently discovered a loophole with Trump accounts that can turn $34,000 into over $7 million tax-free for your child's retirement. Allow me to explain, right after giving a wink and a nod to delete me for sponsoring the channel.

Now for the uninitiated, a Trump account is a government-backed investment account for kids, and it's completely apolitical regardless of the name. It's technically called a Section 530A account, but you know, everything has to be named after him, stakes, watches, buildings, Bibles, even an albino, Buffalo, and Bangladesh. Can't make this up, people. But Trump accounts operate very similar to a traditional IRA once your child turns 18, in that you'll be taxed on the growth of that account, of that account when you withdraw. The only difference here is that you fund the account with after-taxed dollars, which is the part that sucks. You're taxed on the way in, you're taxed on the

way out, and I would expect nothing less from the government. Now, the real draw with these accounts is the $1,000 deposit the government will give every qualifying kid as seed money in the hopes that it will grow into a respectable retirement fund when they get older. And just over a year ago, this is what I had to say about all that. Now, don't get me wrong, I'm all for investing, and I'm not complaining about free money, but this feels more like a PR play than an actual way to help Americans afford the rising cost of life.

You don't need a Trump account to start saving for your kid's future. You can do this yourself at birth if you have $1,000 to spare. Cute shirt, bro. Self-Rosed. Now, to be fair to 2025 me, the details on Trump accounts

were pretty murky when they first came out. And all the murkiness caused me to miss something. But let me tell you something I never miss, overpaying on my phone bill. Gone are the days of paying upwards of $100 or more per month. for a phone line. With Boost Mobile, one of today's sponsors, it's only 25 bucks a month on their unlimited plan. That is a crazy deal. Some would say huge. And the best part is the 25 bucks a month

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Go to privacy.com slash George or use the link in the description. Okay, so what is this loophole? What did I miss? Well, it's the fact that when your child turns 18, a Trump account can be converted into a Roth IRA. Eh? Eh? Just me? No one else excited about this. Okay. Let's go through an example to see how this works. I think you will get excited by the end.

Let's say your daughter, Petunia, or Tuna for short, gets that $1,000 seed money at birth. And from ages zero to 18, you just let that money sit with no contributions on your own. Trump accounts are invested in low-cost index funds based on U.S. stocks. So we're going to assume a 10% annual rate of return on average. Now, by the age of 18, that $1,000 will have grown to about $6,000. Not bad, but not exactly mind-blowing money loophole territory. But here's where it gets juicy. Once Tuna graduates and starts filing taxes on her own,

she can pay the taxes to convert that $6,000 sitting in that now traditional IRA over to Roth. And that's a big deal, because money inside of a Roth doesn't get taxed once you get to retirement. Now, let's imagine at the age of 18, she's not a high earner yet. She's going to be in the 12% tax bracket. That means she would pay roughly $700 in taxes to convert that $6,000 over to Roth. And because it's in her earliest low-income years, she'll pay little, to know federal income tax, followed by decades of tax-free growth. So let's run the numbers.

If she does the Roth conversion at 18, that 6 grand now grows tax-free forever. So by the age of 65, that measly $6,000 grows to roughly $650,000 with tax-free withdrawals. That's like net income, all starting from a little $1,000 government seed deposit. Now, on its own, that's pretty amazing. Combined with whatever's left of Social Security and any investing Petunia does on her own, that sets her up for a pretty amazing retirement. But here's a question worth asking. What if you, as her parent, invested on her behalf as she grew up?

I'm talking something small. Let's say $100 a month. Maybe grandma chips in. Well, the numbers jump dramatically at that point. And I'll show you what this turns into using our handy investing calculator. And I'll drop a link in the description if you want to use this thing for yourself. Okay. So for this example, we got the thousand bucks to start because she was born 20,

So we're going to start with $1,000 from Uncle Sam. Monthly contributions, $100 a month from yours truly, or whoever her parent is. I don't know. I'm not the father. I'm just a guy using a calculator. So we're going to do this from 0 to 18 and see where we end up. That is 18 years to grow.

I'm going to assume a 10% annual average rate of return for a total of $66,000. Now we're 18, we got 66 grand sitting in a traditional IRA. Let's imagine we just let this sit for a couple of years, from 18 to 23. So now we've got 66,000 sitting in traditional IRA. We're not going to do any contributions over those five years. We're just going to let it ride. She's in college.

She's doing her E. Prey Love Journey in Italy. Let her. Over five years of just letting it sit. We are at $108,000. Pretty, pretty good. Now, we're going to owe some taxes. She's now working. She's got a highfalutin salary job, and she's going to pay, let's say, 12%

in taxes. So I'm going to get my calculator out. 12% of this balance. 108-590 is a total of $13,000 in taxes. Cool. We're going to pay that from outside of the account. We don't want to actually touch this investment money. Maybe mom and dad help. Maybe she's saving up to pay those taxes on her own. That's your decision. She's not my daughter. I told you. Take it to Mori. I don't care. So 13 grand is what we're going to pay if we did all of that in one year. You may want to spread it out over a couple years to limit the damage. That's up to you. But overall, for this example, we're going to pay $13,000 in taxes to convert that 108 over to Roth.

Boom. Now, we have $108,590 sitting from the age of 23 to the age of 65. Let's see what that turns into. That is a whopping 42 years of growth. We don't contribute another dime. $7.1 million. That is insane. Now think about this.

You didn't actually put in $108,000. You had the $1,000 of government seed money. You put in $100 a month every year for 18 years. So $1,200 a year times 18 is a total contribution of $21,600 on your part. Plus, if you paid the taxes, that puts you all in at about $34,000 to get $7.1 million tax-free out. That is astonishing. And I can't think of a better way to set up your kid for retirement if you can do this. Now, before you go throwing money in a Trump account, there's a couple of really big butts, and I cannot lie.

For one, I would not use a Trump account to save your kids' college education. Remember, the tax treatment on this thing sucks. Your tax on the way in, tax on the way out. And much better option to save for education is a 529 plan. With a 529, you'll still use after-tax money to fund the account, but then it grows tax-free, and the withdrawals are tax-free for qualified education expenses. But George, what if my kid doesn't go to college, they can go pro and hobby-horsing? I've got no problem with that.

Personal concerns may be with the hobby-horsing thing, but no financial problems. Because with a 529, you can roll up to $35,000 into a Roth IRA over time if they don't end up using it all. Or you can change the beneficiary to any other family member, and they can use that money. And there is a ton of other ways to use those funds that we don't have time for in this video. Just know all is not lost if your kid doesn't use all of the 529 money. So the Trump account is great for your kids' retirement, and the 529 covers your kids' education. But what about the other stuff in between? I mean, I'm a dad of a one-year-old and a three-year-old.

I would love to be able to buy them their first car, pay for a nice wedding, maybe even cover a down payment or the full cost of a starter home, since they'll cost an arm or a leg and an earloat by then. And for that kind of stuff, I invest into a taxable brokerage account in my name. This is a non-retirement account, and again, it's in my name, not my kid's name, so the money stays in my control. I love these accounts compared to something like an Uttma or an UGMA, you may have heard of these. These automatically give your kid unrestricted control of all of that money, somewhere between 18 or 25 depending on your state. Now, I am sure your kid is a sweet angel baby, but when I was 18, my generation was huffing cinnamon and doing park or off parking garages.

Do you really want to hand someone like that tens or even hundreds of thousands of dollars? Do you? With just a normal taxable brokerage account, you get to decide when they're mature enough to handle that responsibility. Now, that's what I'm doing for my family. Talk to your investment pro if you want to know what makes sense for your situation. But consider this your investing for kids starter pack. You've got the Trump account, which can be converted once they're adults over to a Roth.

Great head start for retirement. You've got the 529 plan with amazing tax benefits to cover all things education. And then you've got the taxable brokerage account to cover everything else. So, when in your business, you're going to be able to be a taxable brokerage account to cover everything else. So, when in your money, you've got the $529 plan. your financial journey, are you ready to commit to something like this? Look, before you do anything for your kids, your first job is to take care of your personal finances. And that doesn't make you a bad parent. You've heard this on the airplane. Put the oxygen mask on yourself before helping your kids.

So you want to first get rid of your debt, save up an emergency fund for your family, and start investing for your retirement. At that point, you can begin saving up for your kids college. And your next financial goal after that, I would recommend paying off your house early before you put anything towards your your kids' retirement or one of these Trump accounts. So the priorities for me, I'm going to fund the 529 first, then the taxable brokerage account, and then the Trump account if there's money left over. And the reason is simple. College is coming first, and there's a big price tag attached to that most likely. Those launch gifts like cars or weddings or down payments for your kids, that would be coming next. And your kid's retirement is so far away that it shouldn't be your

priority. It's a nice to have. And if you raise your kid right, they'll be funding their own retirement anyway. And by all means, if your kid is getting the free $1,000 seed money because they were born between 2025 and 2028, take it. Let it grow. Just know that even if you did all of this stuff, the Trump account, the 529, the brokerage account, even if you made your kid a multi-millionaire someday, you still wouldn't be as good a mom or dad as the ones in Bluey. Don't try it. You don't have the accent. All right, now that we've made a plan to make your kid rich, let's talk about the four accounts you need to make yourself rich. That's coming up in this next video, so click here to watch it or use the link in the description. That's it for today.

Thanks for watching.