A Guide to Trump Accounts for Parents
Trump Accounts are a new type of tax-advantaged savings account created under Section 530A that become available beginning July 4, 2026. Designed to help children build long-term wealth, Trump Accounts allow parents, family members, employers, governments, and certain charitable organizations to contribute on behalf of a child. Like traditional IRAs, earnings grow tax deferred and withdrawals before age 59½ are generally subject to ordinary income taxes and a 10% penalty unless an exception applies.
While Trump Accounts can provide a powerful opportunity for long-term investing, families should carefully consider whether their goals are retirement savings, education funding, or other financial priorities.
Key Facts About Trump Accounts
- Available beginning July 4, 2026.
- Established under Section 530A.
- Intended for long-term retirement savings.
- Annual direct contribution limit of $5,000.
- Beneficiaries gain control at age 18.
- Withdrawals before age 59½ are generally subject to taxes and penalties.
- Investments are limited to low-cost broad U.S. stock index funds.
How Can You Contribute to a Trump Account?
There are four types of contributions that can be made to a Trump Account:
Direct Contributions
- Anyone may contribute on behalf of a beneficiary.
- Total annual contributions are capped at $5,000 per beneficiary, with a December 31 deadline each year.
- Contributions are made with after-tax dollars and are not deductible.
Section 128 Employer Contributions
- Employers may contribute up to $2,500 annually to an employee or the employee’s dependents.
- The $2,500 limit applies per employee, not per dependent, so it must be divided among multiple dependents if applicable.
- These amounts count toward the beneficiary’s $5,000 annual direct contribution limit.
- Unlike direct contributions, employer contributions are generally made on a pre-tax basis (subject to certain state limitations).
Qualified General Contributions
- Federal, state, and local governments, as well as qualified charitable organizations, may make contributions.
- No dollar limit applies, and these amounts do not reduce the $5,000 annual direct contribution limit.
- Contributions are tax-free to the beneficiary (subject to certain state limitations).
Pilot Program Contributions
- Eligible U.S. citizens born between 2025 and 2028 may receive a one-time $1,000 seed contribution the U.S. Treasury.
- This amount does not count toward the $5,000 annual direct contribution limit.
- The contribution is excluded from income.
- To receive the contribution, the beneficiary must be enrolled by filing IRS Form 4547.
What Can Trump Accounts Invest In?
Trump Accounts may invest in mutual funds and ETFs that track broad U.S. equity indexes. Investments tied to sector-specific indexes are not permitted, nor are bonds or other fixed-income investments. Additionally, eligible funds must maintain expense ratios below 0.10%.
When Can Money Be Withdrawn From a Trump Account?
When the beneficiary turns 18, they gain full control of the account and can begin taking withdrawals. However, the account follows the same rules as a traditional IRA: Withdrawals taken before age 59½ are generally subject to a 10% early-withdrawal penalty and are taxed as ordinary income.
What Happens to a Trump Account at Age 18?
When the beneficiary of a Trump Account turns 18, they generally have four options:
- Withdraw the Account Balance: The beneficiary may withdraw some or all of the assets, although taxes and other considerations may apply.
- Roll the Account into a Traditional IRA: The account balance may be transferred to a traditional IRA, allowing the assets to continue growing on a tax-deferred basis.
- Convert Assets to a Roth IRA: Some or all of the account may be converted to a Roth IRA, which could provide future tax benefits depending on the beneficiary’s circumstances.
- Keep the Account as a Trump Account: The beneficiary may choose to leave the account unchanged, though other options may offer additional planning opportunities.
How Do You Open a Trump Account?
A Trump Account can be opened by submitting IRS Form 4547 and completing the account setup process through the official Trump Accounts website or mobile app. The program’s initial accounts are administered through BNY, with Robinhood serving as the brokerage and initial trustee. Account holders are not required to remain with the initial provider indefinitely, however, as TAs may generally be rolled over to another eligible custodian that offers Trump Accounts in the future. More information, including eligibility requirements and enrollment instructions, is available at trumpaccounts.gov.
Trump Accounts vs. 529 Plans
| Feature | Trump Accounts | 529 Plans |
| Primary purpose | Retirement savings | Education savings |
| Tax treatment | Tax deferred | Tax-free qualified education withdrawals |
| Control at age 18 | Transfers to beneficiary | Owner retains control |
| Investment restrictions | Broad U.S. equity funds | More flexible |
| Early withdrawals | Tax plus penalty generally applies | Non-qualified withdrawals taxed and penalized |
Are Trump Accounts Right for You?
Trump Accounts introduce a new way to help the next generation build long-term wealth, but whether they are the right fit depends largely on a family’s goals and broader financial picture. For some families, retirement-focused savings may make sense, while others may find that education savings or more flexible planning strategies better align with their objectives.
Because Trump Accounts are a relatively new program, guidance surrounding their operation, tax treatment, and planning considerations may continue to evolve. The information presented here is based on currently available guidance and should be considered subject to change as additional regulations, IRS guidance, and practical experience with the program develop over time.
As with many financial planning decisions, the most appropriate strategy depends on your unique circumstances. If you have questions about how Trump Accounts may fit into your overall plan, our team is available to help you evaluate your options.
Frequently Asked Questions
What are Trump Accounts?
Trump Accounts are tax-advantaged savings accounts created under Section 530A to help children accumulate long-term retirement savings.
When do Trump Accounts become available?
Trump Accounts are scheduled to become available beginning July 4, 2026.
Who can contribute to a Trump Account?
Parents, grandparents, other individuals, employers, governments, and certain charitable organizations may contribute, subject to applicable rules.
What can Trump Accounts invest in?
Trump Accounts are limited to mutual funds and ETFs that track broad U.S. equity indexes and meet certain expense ratio requirements.
Can money be withdrawn before age 59½?
Yes, but withdrawals before age 59½ are generally subject to ordinary income taxes and a 10% early-withdrawal penalty unless an exception applies.
What happens when the beneficiary turns 18?
The beneficiary assumes control of the account and may leave the assets invested, withdraw funds, roll the account into a traditional IRA, or convert assets to a Roth IRA.
Are Trump Accounts better than 529 plans?
Not necessarily. Trump Accounts are designed primarily for retirement savings, while 529 plans are intended for education expenses. The most appropriate option depends on a family’s goals. If funding college is on your mind, explore more ideas in College Planning Strategies for High-Income Families in 2026.