George Kamel, a personal finance expert and Ramsey Solutions personality, did not hesitate to accept the federal government’s $1,000 seed contribution into the newly launched Trump Account for his 1-year-old son in July. While he welcomed the cash, he is cautioning other parents about the program’s tax fine print and a common financial misstep that could undermine their own long-term security.
“As someone who has a 1-year-old and 3-year-old, I took advantage of this. And on the Fourth of July, that $1,000 came into the account for my son, and I went, ‘Woo! A little money back from the government that I’ve given so much to,'” Kamel told Fox News Digital. “If you can understand the power of compound growth, then this Trump Account was worth it just to get your mind thinking about it. But the truth is, the tax benefits are not great on this.”
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The Trump Account rollout and its mechanics
The Trump Accounts initiative, which debuted as part of new tax legislation in 2026, provides a $1,000 deposit to every eligible newborn U.S. citizen whose parents enroll them in the program. No initial contribution is required, but families can deposit up to $5,000 annually, with funds invested in a qualifying U.S. stock index fund.
The program’s launch was marked by President Donald Trump ringing the opening bell of the New York Stock Exchange on July 6, 2026. During a public Cabinet meeting on July 31, President Trump announced that more than 7 million accounts had been opened since the launch date, indicating strong early adoption.
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Kamel highlighted the potential long-term growth of the initial deposit. “Here’s the math on this: If you get the free $1,000, well, that could grow to almost half a million or more by the time my kid is 65, without ever adding anything to it,” he said, noting the power of compound interest over decades.
Better alternatives for education and the parent-first rule
While acknowledging the account’s benefits, Kamel was clear about its limitations compared to other investment vehicles. “Save the 529 plan for education. That has way better tax advantages. You’re using after-tax income, you withdraw it tax-free, it grows tax-free. That is the best move for education expenses,” he explained.
For non-education savings, he pointed to custodial Roth IRAs as a strong option, though they require the child to have earned income. “The real power of the Trump Account is that there is no earned income needed,” he added.
Kamel’s primary warning, however, was aimed at parents who might rush to invest for their children while neglecting their own financial foundation. “The sad truth is most Americans aren’t investing for themselves, let alone have the ability to invest for their kids,” he said. “We tell people, hey, become debt-free, don’t owe other people money, have an emergency fund so that you have the margin to build wealth for yourself. And once you’re investing 15% of your own income into your own retirement, then and only then should you be thinking about investing for your kids.”
He emphasized that this order is critical to avoid burdening the next generation. “A lot of kids are having to support their aging parents who didn’t plan for their own retirement. So now they’re having to fund their retirement while trying to support their own life and their own kids. This has put a real bind and burden on the younger generations,” Kamel said. “I don’t wanna do that to my kids.”
Kamel’s guidance suggests that while the Trump Account offers a valuable entry point into investing for children, it should not come at the expense of a parent’s own financial health. His advice frames the account as a tool for building a legacy, provided the foundational steps of debt elimination and retirement savings are already in place.
