Financial expert Dave Ramsey highlights tax advantages of 529 plans, estimating $5,400 in savings compared to Trump Accounts.
Personal finance expert Dave Ramsey recommended parents continue using 529 College Savings Plans instead of newly launched Trump Accounts, citing significant tax benefits. Withdrawals from 529 plans for education expenses are tax-free, while gains from Trump Accounts are treated as taxable income, potentially costing families an additional $5,400 in taxes.
The advice follows a caller’s inquiry on *The Ramsey Show* about whether to switch from existing 529 plans, which held roughly $1,500 per child, to Trump Accounts for ongoing contributions. Ramsey dismissed the newer option as a branding effort, emphasizing the established advantages of 529 plans for college savings.
Ramsey also reiterated that parents should prioritize 15% retirement contributions before funding college accounts, as students can borrow for education while parents cannot for retirement.