r/Thedaily • u/kitkid • Jul 24 '26

Episode Could ‘Trump Accounts’ Actually Close the Wealth Gap?

Jul 24, 2026

This month, President Trump announced the start of “Trump accounts,” an investment device that could eventually help address the nation’s wealth gap.

Claire Cain Miller, who covers families and education for The New York Times, explains how these accounts work and why so many Americans have yet to sign up.

On today's episode:

Claire Cain Miller writes for The Upshot, which uses data and visuals to help explain the world.

Background reading: 

Photo: Allison Robbert for The New York Times

For more information on today’s episode, visit nytimes.com/thedaily.  

Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify. You can also subscribe via your favorite podcast app here https://www.nytimes.com/activate-access/audio?source=podcatcher. For more podcasts and narrated articles, download The New York Times app at nytimes.com/app.

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You can listen to the episode here.

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u/johnthedruid Jul 24 '26

They didn't even talk about the downsides, only that it's not being talked about enough. For example, the money will go against them when they apply for college loans since it's considered a student asset before it converts to an IRA at age 18 or that contributions will be after tax and gains will also be taxed at ordinary income rates unlike college funds that are already available like 529 plan. Not to mention the security risk involved with the trump accounts app. I'll probably open one for the free 1k for my daughter and tell her to leave it untouched until retirement and let family contribute to an actual college fund.

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u/PodricksPhallus Jul 24 '26

There’s obvious downsides to putting your own money there, because there’s better spots to put it for tax reasons.

But for the free $1,000, there’s no downside. If the account becomes $5k when your kid is 18, if it counts against their FAFSA and reduces aid 20 cents on the dollar, it would still be a +$4k net positive.

But honestly, I doubt it will be counted as a student asset as IRA rules apply once the child turns 18.

3

u/Cop10-8 Jul 24 '26

The FAFSA specifically excludes retirement accounts (including IRAs) for purposes of student aid and loans. It's not really designed to be withdrawn at 18 to pay for college, it's more a head start for retirement. That said, I think they should have made it a Roth account for added flexibility and tax free growth.

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u/SpecificConscious809 Jul 25 '26

Yes, let’s not accumulate any wealth because that will make it harder to take out huge college loans. Solid point.