Imagine the joy of giving your child a head start on their financial future—tax advantages, employer contributions, and the potential to grow into a fully funded retirement account. That’s the goal of the new Trump Accounts, a program designed to encourage long-term saving and investing behavior. As with any new program, there may be some uncertainty as the details get ironed out.
In this blog post, we’ll answer the most frequently asked questions about Trump Accounts and explain how they could fit into your family’s financial plan.
What are Trump Accounts?
Trump Accounts are new tax-advantaged investment accounts for children under 18. They were created under the One Big Beautiful Bill Act and function similarly to traditional IRAs, with special rules that apply during childhood.
Who are they for?
Any child under 18 with a Social Security Number can open an account. Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens will receive a one-time $1,000 contribution from the Treasury Department to get the account started.
Source: NBC News
How do I sign up my children for an account?
Parents can enroll their children by filing IRS Form 4547 with their 2025 tax returns or through TrumpAccounts.gov. Keep in mind that the program does not officially launch until July 5, 2026.
Source: CNBC
How do contributions to the account work?
In addition to the $1,000 from the Treasury Department, annual contributions are capped at $5,000 per dependent, with the potential for up to $2,500 coming from an employer. Employer contributions are excluded from the employee’s taxable income, and contribution limits may adjust for inflation starting in 2027.
Once in the account, funds must be invested in mutual funds or ETFs that track the S&P 500 or another index of primarily American equities with expense ratios of 0.10% or lower. At this time, a primary custodian for these accounts has not been named.
Source: Internal Revenue Service
What happens when my child turns 18?
When the beneficiary turns 18, the account converts to a standard traditional IRA and follows the rules for traditional IRA distributions. The account provides a head start on retirement savings and can continue to receive contributions until retirement.
At age 18, the beneficiary may also convert funds to a Roth IRA with minimal tax impact, since their income is likely low as they enter adulthood. Also, certain distributions can be made while avoiding the 10% early withdrawal penalty, such as withdrawals for higher education expenses, or up to $10,000 toward a first-home purchase.
Should I open an account for my children?
That is a loaded question, but if you are reading this article, it is most likely the question you are asking. If your child is born between January 1, 2025, and December 31, 2028, opening an account is a straightforward way to claim the $1,000 starting contribution. If your employer offers to contribute, that is also essentially "free" money.
Deciding how to contribute your own funds requires weighing options within the context of your broader financial plan. Our team at Harvest Point® can help you determine how a Trump Account might fit with your overall strategy.
If you are not currently working with a financial advisor, we invite you to complete our Discovery Questionnaire to schedule a 30-minute introductory call. We’d love to discuss your legacy, values, and goals—and explore whether Harvest Point® is the right partner to help you achieve them.