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IN THIS ISSUE: Trump accounts, a savings trend, and home cost cutters |
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THE HEADLINES
Baby bumpWhat’s happening: Parents could soon make pre-tax contributions from their paychecks into Trump Accounts for their kids. (What’s a Trump Account again? It's a new, custodial-style traditional IRA for minors—owned by the child but administered by an adult.) |
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Tell me more: If the US Treasury guidance is finalized as proposed, employees could fund Trump Accounts with pre-tax money, like contributions to traditional 401(k) and health savings accounts that can reduce taxable income. Employers would also be allowed to contribute up to $2,500 to these accounts. These employer contributions are not included in the employee's income.
What it means for you: Should you open a Trump Account for your child? Here’s
how to know if it makes sense for your family. If it does, learn
how to open a Trump Account and how it compares to other saving and investing accounts for children. Plus,
sign up to receive updates, including when you can transfer the account to Fidelity. |
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To the maxWhat’s happening: “Moneymaxxing” is all over social media. The trend encourages people to cut recurring expenses, use rewards points, and send more money to high-interest savings accounts.
Here’s why: Increasing inflation, debt loads, job insecurity, and global conflict fears could be why smart money habits are going viral.
What it means for you: Spending less so you have more to save and invest is always a good idea, even when it’s not trending. You might start by taking a magnifying glass to your budget and assessing whether your spending patterns match up with your financial goals. Need some next steps? Try: |
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Tax changes
What’s happening: One year later, the One Big Beautiful Bill Act (OBBBA) is still reshaping tax planning.
Tell me more: OBBBA lowered taxes for some taxpayers: seniors, parents of younger children, and those with high state and local taxes. But there are a few provisions you may not have heard about:
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Expanded health savings account (HSA) uses:
The legislation widens the types of health plans eligible to use HSAs to include public marketplace bronze and catastrophic plans. It also makes permanent an extension for telehealth arrangements.
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Expanded 529 uses:
Funds can now be used for testing fees, tutoring outside the home, and educational therapies for students with disabilities. Tax-free withdrawals for recognized postsecondary credential programs are now allowed too.
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Deductible car loan interest:
A temporary deduction allows single taxpayers with modified adjusted gross income of $100,000 or less ($200,000 or less for those married filing jointly) to deduct up to $10,000 of loan interest for purchased vehicles whose final assembly took place in the US.
What it means for you: Because tax rules can be complicated and personal situations vary, it may be helpful to speak with a financial or tax professional about your individual needs. Learn more about
the new tax law and get tips on
making tax-smart investing part of your plan. |
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HOW TO
Tell if you’re being paid wellAre you earning as much as others with your education level and in your state? |
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WORTH A TRY?
Consider low-fee investmentsSavvy investors know they can’t control the market, but they can control costs. One way to do that: investing in lower-fee funds. Not only could you keep more of your investing dollars but the returns could be better too. A Morningstar analysis of stock and bond funds over the 20-year period ending in January 2025 found that, on average, the lowest-cost funds outperformed the highest-cost funds every year.1
If you already own a fund that has a lower-cost equivalent available, it may make sense to make the switch. Fidelity’s Mutual Fund Evaluator
and ETF Screener2🔒 allow investors to filter and sort funds by many different criteria, including expense ratio. Reading the fund’s prospectus—a document about risk, past performance, objectives, and expenses—can help you make sure the fund meets your investing goals. Keep in mind that higher fee investments may come with additional management, guidance, and services, so take stock of any benefits before making a switch too. |
