By Robert E. Quittner, Jr. CFP® & CMFC™
Investment Advisor Representative
[email protected]
A few weeks ago, I wrote about the “Die with Zero” concept—a mindset that encourages people to enjoy their wealth while they’re alive by intentionally giving while living. Today’s article piggybacks on that idea, especially for grandparents who want to help their grandkids now rather than later.
One of the most popular ways to do that is by funding a 529 college savings plan. But with the recent introduction of the One Big Beautiful Bill Act (OBBBA)—President Trump’s sweeping new tax law—there are even more options on the table for helping your grandkids financially. Let’s break it all down in plain English.
1. Introducing “Trump Accounts”: A New Savings Tool for Grandkids
- Yep, these are real—and they’re designed specifically for kids and grandkids.
Here’s how Trump Accounts work:
- You (and other family members like aunts and uncles) can contribute a total of $5,000 per year per child through age 17.
- The money grows tax-deferred by investing in low-cost index funds and cannot be withdrawn prior to age 18. After age 18, these accounts will be subject to similar rules as traditional IRAs, including taxation.
- Kids born between 2025 and 2028 will receive a $1,000 “starter gift” automatically from the federal government.
- These accounts will become available starting July 2026.
What can the money be used for?
Funds can be used for anything, though a 10% tax penalty may apply if withdrawn before age 59 ½. Exceptions include college expenses, first-time home purchases, and other qualified uses.
Some employers are already getting involved. Dell, for example, announced a $1,000 match for employee contributions into Trump Accounts.
2. 529 Plans Are Getting a Makeover
If you already have a 529 plan—or are considering starting one—there are some exciting updates you should know about:
- Annual withdrawals for K–12 tuition increase to $20,000 (up from $10,000) starting in 2026.
- Funds can now be used for more than just tuition: books, tutoring, online courses, and dual-enrollment college classes all qualify.
- Not going to college? No problem. 529 funds can now be used for career training programs or rolled into a Roth IRA—tax-free—for your grandchild’s retirement.
These changes give families more flexibility and open the door to a wider range of education and career paths.
3. Tax Breaks for Supporting School Choice
If you’re passionate about private school, homeschooling, or school scholarships, the OBBBA offers a generous incentive.
- Donations to Scholarship Granting Organizations (SGOs) now qualify for a dollar-for-dollar tax credit starting in 2027.
- You can reduce your tax bill by up to $1,700 of your adjusted gross income through these donations.
Just a heads-up: Not all states participate. Some, like Colorado, Kentucky, and Nebraska, currently don’t support these types of school choice programs.
So, What Does This Mean for Your Family?
Whether you’re thinking about saving for college, helping a grandchild pursue a trade, or simply looking to give smarter, the OBBBA brings some powerful new tools to the table.
Here are three steps to consider:
- Plan to open a Trump Account when they become available in 2026.
- Review your current 529 strategy to take advantage of the new rules.
- Consider donating to an SGO if you’re interested in school choice—and wouldn’t mind a tax break.
Want help figuring out what makes the most sense for your situation? Reach out to myself, Peter, Kyle, Jeremy, or Nick. With a few smart moves now, you can help set your grandchild up for a more flexible, financially secure future.
Enjoy your weekend!
Rob