Trump accounts vs. Path2College 529

Let's talk about this next door. We know President Donald Trump will be in Cobb County pretty much 24 hours from now. He's here to highlight the new Trump Savings Program for children, but with Georgia also making major changes to its Path to College 529 plan, we wanted to know what does this actually mean and what the differences are, because many parents I'm sure are wondering which option is going to be right for their families. So joining us now is Bethany Wetzel, Treasury Program Director for the state of Georgia, to help break it all down. Bethany, thanks for being here. Thank you for having me, Tyler. Great to be here. Yeah, this is an important topic. I think a lot of people are wondering what the differences are, so let's start there. So what exactly is the Trump Savings Account and what exactly is it, how is it different than Georgia's Path to College 529 plan? Right, great question. So a Trump Savings Account is a way for a family to start building long-term wealth and retirement savings for their child. So they are different than a 529 plan in that a 529 plan is designed specifically for education savings, and really what you choose or how you use them is going to depend on your savings goal. Well, and so does one really replace the other? Are they kind of mutually exclusive? Can you do both? Will it benefit you to have both? Is one better than the other? I mean, what should parents weigh here? So right, so they aren't competing resources or competing tools. They really are designed or really can complement each other, and again, it's going to depend on your savings goal. So a Trump Account, if a baby is born in between the years or in the years of 2025, 2026, 2027, and 2028, they're going to get a $1,000 seed contribution to their account from the federal government. So that is free money, and really, if you are a parent of one of those kids, you should take that money. You shouldn't leave that on the table. And then if you do that, you want to decide what you want to use that account for. There are restrictions on when they can be accessed. The funds can't be accessed until they are 18 years old, and then once they turn 18, it turns into somewhat of a traditional individual retirement account, an IRA, and it follows those same rules. So if you are planning for education expenses, if you use a Trump Account as that tool, when that child reaches 18 and you withdraw that money for education, you're going to have to pay tax on the earnings, whereas a Path to College Account or just a 529 account, you're going to get that tax-deferred growth where you don't have to pay tax on the earnings when it occurs. And then when you withdraw the money for qualifying education expenses, you do not have to pay taxes on those withdrawals. And then in Georgia, if you're a Georgia taxpayer and you contribute to a Path to College plan, you get a state income tax deduction. So there's triple tax benefits when you use Path to College 529 plan as a tool for saving for education. So those are just some things you have to weigh when you're deciding, do I want to use a Trump account for saving for education or do I want to use a 529 account? Again, they can complement each other because a Trump account can be used after 18 for some other purposes that a 529 account can't be used. So you can roll it, it can be saved until the individual reaches 59. It can be used for retirement and it can be used for a first-time home purchase up to $10,000. Yeah, I mean, honestly, it sounds like the Trump Accounts, I'm learning a lot with you here, the Trump Account sounds like free money. So it sounds like people should do it if they qualify for it and be able to, the parents should do it for their kids so they can benefit from it years to come. But I want to be able to talk about this. So Georgia just announced some major changes to its 529 plan. What are those updates and how does it benefit families? Right, so there are really two major changes that we have done in the last couple of months. One is that the legislature increased the maximum account balance limit prior to June. The amount that you could have in an account, a Catholic college account, was $235,000. It has been raised to $550,000. And that was in recognition of the cost of post-secondary education has risen. And additionally also recognizes that you can use 529 funds not just for college but also for K-12 expenses and also for apprenticeship programs and trade schools, non-traditional schooling. So it recognizes that more money is needed now that can be used for education expenses. And then the second thing is that the Georgia Higher Education Savings Plan Board waived the administrative fee. So we are now assessing no administrative fee, which means that Georgia's Path to College Plan is the lowest cost plan in the nation. So it's really a good value. It's a great plan as far as how it's managed and run and a good option. But now it is the lowest cost plan in the nation for someone to use for saving for college. Bethany, we're running out of time here. In about 20 seconds, what can you tell us the biggest piece of advice you have for parents and guardians who are looking to save for their child's future but don't know where to start? Right. So I would recommend that you do some research. You can start by doing that by going to our website at www.paththenumbertocollege5529.com. You can learn more about that. And then also just set some goals and figure out what your goal is for saving for your child. And that saving early is regardless of how you save and what you use is what's important. Saving early and saving consistently. Bethany Wetzel, thanks so much for joining us here on Fox 5 News Live at 1 o'clock. I do appreciate it. Great topic to talk about as parents are navigating this and obviously with President Donald Trump coming to our area to talk about Trump accounts tomorrow. Thanks again for joining us.