In 2026, you’ll likely start hearing about “Trump Accounts,” a new savings vehicle for children under 18. As media coverage increases, our goal is to help you understand what they are, how they work, and whether they make sense for your family. For more detailed information, we recommend you visit TrumpAccounts.gov.
Trump Accounts Overview
Established through the Working Families Tax Cuts Act, Trump Accounts offer tax-advantaged growth for children under 18. If you’re thinking about your family’s financial future, here’s what you need to know about these accounts and how they fit into your broader planning strategy.
Trump Accounts are IRA-style investment accounts designed specifically for U.S. citizen children under 18. They’re administered through IRS.gov and offer tax-deferred growth similar to traditional retirement accounts.
Eligibility: Any U.S. child with a Social Security number can have an account opened on their behalf.
Incentives:
- Children born between January 1, 2025, and December 31, 2028, will receive a $1,000 government deposit to start their account.
- A $250 bonus is available for the first 25 million children aged 10 and under who meet certain income bracket requirements.
Contribution Limits: Starting July 5, 2026, parents and guardians can contribute up to $5,000 per year using Form 4547.
Growth: Funds are invested in a market index and grow tax-deferred until the child reaches age 18, when it transitions to a traditional IRA.
Withdrawal Procedure
At age 18, account holders can withdraw funds without penalties for three specific purposes:
- Education expenses
- Purchasing a first home
- Starting a business
This flexibility sets Trump Accounts apart from 529 Accounts that limit usage to education only. The tax treatment of withdrawals depends on how the funds are used, similar to how Roth IRAs handle qualified distributions.
If the funds remain untouched, they continue growing tax-deferred. The compounding potential over decades could result in substantial savings by the time the account holder reaches their 50s or beyond.
Planning for the Future
For families with the capacity to fund multiple savings accounts, Trump Accounts add another tool to the planning toolkit. The government seed deposit provides a meaningful head start, and the withdrawal flexibility at age 18 gives the next generation more options beyond pursuing higher education.
Whether you’re a parent just starting to think about your child’s financial future or a grandparent looking to leave a legacy, these accounts deserve a place in the conversation.
Want to discuss how Trump Accounts fit with your family’s broader financial plan? We’ll help you think through the strategy that makes sense for your situation. Give us a call at 952-460-3290.
Advisory services offered through Secured Retirement Advisors, LLC. Secured Retirement Advisors is registered as an investment advisor with the Securities and Exchange Commission and only transacts business in states where it is properly notice filed, or is excluded or exempted from registration and/or notice filing requirements.
