Several Dozen Specials and Counting
My family loves going out for Mexican food. Living in Atlanta offers a wide range of options, from the faded place with vinyl booths where the salsa arrives before you sit down to newer concepts that lean considerably more Tex than Mex. What always gets me is the menu, which seems to grow with every visit. The specials section is now up to several dozen numbered plates, and they all look pretty good. Which, of course, is the problem. More options don’t make ordering easier.
Families with an interest in giving to children and grandchildren now face a similarly extensive menu. The list of tax-advantaged vehicles keeps expanding, every option looks appealing, and the real challenge has shifted from finding a way to give to choosing among many.
The 529 is the house specialty that’s been quietly upgraded. Once a one-way bet on a four-year degree, qualified expenses now span tuition, room and board, K-12 tuition, apprenticeships, and postsecondary credentialing programs. Up to $35,000 can roll into the beneficiary’s Roth IRA, scholarships unlock penalty-free withdrawals dollar-for-dollar, beneficiaries can be swapped across the family, and $10,000 can retire student loans. The old “what if she skips college” objection has largely been taken off the menu.
The custodial Roth IRA is the authentic dish that regulars order. No frills, decades old, and quietly the best value in the house. The moment a child has earned income from lifeguarding, a genuine role in the family business, or a summer internship, they can contribute up to that income (capped at $7,500 for 2026), and nothing stops a grandparent from gifting the matching cash. Five funded summers compounding tax-free for fifty years may be the highest return gift in the family playbook.
The Trump account is the new menu item. Children born 2025 through 2028 receive a $1,000 federal seed; families may add $5,000 a year, and at 18 the account becomes essentially a traditional IRA. This gives kids an interesting head start, although the kitchen is still working out the recipe. Congress neglected to specify that contributions qualify as present-interest gifts the way 529 contributions do, so for now a $5,000 contribution to a newborn’s account technically requires a gift tax return. Consider the Form 709 gift tax return the heartburn that arrives two hours after a perfectly pleasant meal. While Treasury has promised guidance, employer contributions and other mechanics likewise remain reserved for future rulemaking.
Parents and grandparents are also grappling with another unknown. Nobody can say with confidence what any particular degree or credential will be worth in a labor market being reshaped by AI. Instead of becoming frozen by that uncertainty, families should see it as an added reason to embrace today’s flexible toolkit, with 529s that can roll into Roth IRAs or pass to a sibling and newer accounts that simply grow up into retirement savings if education isn’t the path.
The good news about this menu is you don’t have to order just one thing. The combination plate exists for a reason. Blend the vehicles and coordinate them with your estate plan, and the gift will be ready for whatever your family is hungry for when the future arrives.
Cam Simonds