Trump Accounts: A guide for parents

 Published February 2026

Every parent wants to give their child a strong financial start, and understanding the different savings options is an important first step. Starting in July 2026, parents will be able to fund a new type of investment vehicle, known as a Trump Account, for their children.  

If you have children under the age of 18, you may have questions about this new option. We can help you better understand Trump Accounts and the other investing options available to save for your child’s future. 

Note: Regulatory requirements and guidance may change before contributions to Trump Accounts are permitted this July. 

What is a Trump Account and how does it work? 

Created as part of the One Big Beautiful Bill Act (OBBBA) of 2025, a Trump Account is a tax-advantaged retirement savings vehicle for U.S. citizens under the age of 18. This savings vehicle functions essentially as a "starter" IRA for children under 18, but with different contribution limits, investment rules and other requirements. 

Contributions to Trump Accounts are made with after-tax dollars, earnings grow tax-deferred and withdrawals are taxed as ordinary income. However, unlike with a traditional IRA, contributions to a Trump Account aren’t tax-deductible. 

What are the rules and restrictions governing a Trump Account?  

Trump Accounts come with specific eligibility criteria and investment requirements. Here is a breakdown of the key rules: 

• Age limit: U.S. citizens who are under 18 years old, as of the calendar year-end, are eligible to establish a Trump Account. 
• Account ownership: The account is in your child’s name and the parent/legal guardian acts as the sole custodian. Similar to custodial IRAs, once the child is no longer a minor (age 18 in most states), they will have full access and control over the account. 
• Investment requirements: Funds must be invested in mutual funds or exchange-traded funds (ETFs) that track the return of either the S&P 500 Index or another index that consists of equity investments primarily in U.S. companies. Management fees are capped at 10 basis points (0.10%). 
• Contribution limit: Starting in 2026, the maximum annual contribution limit will be $5,000. This limit includes contributions by friends, employers and family and will be adjusted for inflation beginning in 2028. Contributions by governments and charities are not subject to this limit. 
• Distributions and penalties: Prior to age 18, distributions are not allowed. At age 18, distributions from the account are permitted, but would be subject to the 10% early withdrawal penalty until age 59½. Trump Account owners can avoid the 10% early withdrawal penalty when using assets to pay for eligible education expenses or to purchase a first home. 
• Rollover capability: Account holders will be able to transfer their Trump Account to a traditional IRA and, if beneficial, convert to a Roth IRA. 
• Employer contributions: Employer and employee salary reduction contributions may also be available subject to a $2,500 limit per employee. These contributions are not included in the employee's gross income, provided they are made through a formal program. Employer contributions count toward the $5,000 contribution limit described above. 
• Estate planning: If the account beneficiary passes away before the calendar year in which they turn 18, the account loses its status as a Trump Account and becomes taxable to the beneficiary. 

How do I open and contribute to a Trump Account? 

Parents or legal guardians can open a Trump Account using IRS Form 4547 when they file their 2025 tax return or through an online portal that is expected to be available by summer 2026. Contributions can be made to Trump Accounts after July 4, 2026. The official Trump Account provider will be announced by the federal government at a later date. At this time, parents will not be able to choose the provider. 

Who qualifies for the $1,000 pilot program?  

To encourage adoption of these Trump Accounts, the government has created a pilot program offering a one-time contribution of $1,000 for U.S. citizens born after Dec. 31, 2024, and before Jan. 1, 2029. Your child may be eligible for additional one-time contributions depending on where you live. 

What are other ways to save for my child’s future? 

If saving for your child’s future is your priority, there are a variety of financial accounts available to help you achieve that goal: 

• 529 plans: 529 plans are a type of tax-advantaged investment account that parents can use to save for their child’s qualified education expenses, including college tuition, graduate school costs and more. Unused funds in a 529 plan may be transferred to another beneficiary or rolled over into a Roth IRA for the beneficiary, subject to limits.  
• Custodial IRAs: A custodial IRA is a retirement account an adult opens and manages for a minor. It can offer the same tax advantages as a traditional or Roth IRA, but the account is controlled by the custodian until the child reaches the age of 18. Anyone can contribute but the minor must have earned income from work such as a part-time job or freelance activities. (Trump Accounts do not have an income requirement.)  
• UTMA and UGMA accounts: Custodial accounts established under the Uniform Transfers to Minors Act (UTMA) and the Uniform Gifts to Minors Act (UGMA) allow the transfer of various types of assets to a minor without the need to establish a trust. 

Save for your child’s future 

We are here to help you make informed decisions about saving and investing for your child’s future. If you’d like to explore whether a Trump Account, 529 plan, UTMA, custodial IRA or other savings account is right for your family, reach out to us for personalized guidance tailored to your financial goals.