If you have kids or grandkids under 18, you’ve probably heard about “Trump Accounts.” They are the new government-created retirement accounts for minors. Here’s a quick rundown of how they work and where they might fit alongside the accounts you already use.
Trump Accounts (officially IRC Section 530A accounts) were created by the 2025 tax law and function as a special type of IRA for kids. Here are the few key facts you need to know:
Who's Eligible: Any US citizen under 18 with a Social Security number. There are no income requirements, and the child doesn't need earned income to qualify.
Date Contributions Can Start: July 4, 2026.
Annual Contribution Limit: $5,000 per beneficiary (indexed for inflation starting in 2028). Parents, grandparents, or anyone else can contribute, up to that combined cap.
Employer Contributions: Employers can contribute up to $2,500/year tax-free, on top of the $5,000 individual cap.
Government Seed Money: Kids born between January 1, 2025 and December 31, 2028 get a one-time $1,000 federal deposit into their account.
Charitable Donation Seed Money: Certain individuals may qualify for additional free money from private foundations that have donated money to the accounts. This may include $250 from the Michael & Susan Dell Foundation. To qualify a child must be under 10 years old and live in certain ZIP codes with median incomes below $150,000. There are other private foundations that have provided up to $250 for eligible children in a few states.
Investments: Contributions are invested in a low-cost US stock index fund selected by the account custodian.
No Withdrawals until 18: During this “growth period,” there are no distributions of any kind, including hardship exceptions. At 18, the account converts into a regular Traditional IRA and control passes to the (now adult) beneficiary.
A 529 is still the stronger tool if the money is earmarked for education. A 529 account offers larger contribution room, state tax deductions in many states, and more control retained by the account owner. A Trump Account is not education-specific; once it converts to a Traditional IRA when the child turns 18, it’s retirement money, subject to standard IRA rules (and typically taxed on withdrawal, apart from basis).
Brokerage accounts give you full flexibility on how and when funds are used, but dividends, interest, and realized capital gains are taxed annually (kiddie tax rules apply). Trump Accounts defer taxation until IRA-style withdrawals begin later in life but lock the money up longer and narrower in purpose.
If your teenager has earned income, a Roth IRA for minors is often still the better long-term retirement vehicle — higher contribution limits, tax-free (not just tax-deferred) growth, and more flexible early-withdrawal provisions. A Trump Account doesn’t require earned income, which is what makes it accessible to younger kids who can't otherwise contribute to an IRA at all.
There are three situations where a Trump Account makes the most sense:
If your primary goals are other than early retirement funding, you’ll likely find a better option with a different account. For example:
Trump Accounts are best thought of as a new piece of the puzzle, not a replacement for your existing education or retirement savings strategy. For most families, the right move is opening one to capture the seed money and any employer matching, while continuing to lean on 529s and brokerage accounts for the goals those tools were actually built for.
At Global View, we help families evaluate new opportunities in the context of their long-term financial goals. We’re here to help you understand how each account fits together, so your savings strategy supports your family for years to come.
This post is for general educational purposes and isn't personalized investment, tax, or legal advice. Contribution rules and IRS guidance on Trump Accounts are still being finalized.
What is a children’s tax advantaged account? Similar to an IRA, a children’s tax-advantaged account, or a Trump Account, is a new type of investment account designed to provide children with a long-term investment opportunity that can continue growing until they reach adulthood.
How do you open a Trump Account? A Trump Account can be opened for your children by completing and submitting IRS Form 4547. Once the election has been processed, you can activate the account through the official Trump Account app and begin funding.
What is form 4547 for the Trump Account? Form 4547 is the IRS form used by a parent, guardian, or authorized individual to elect to establish a Trump Account. It can also be used to request the $1,000 federal pilot-program contribution for eligible children.
Are Trump Accounts a good idea? Trump Accounts can be a useful way to capture benefits such as the $1,000 federal contribution and provide your child with a hard start on a long-term investment. However, if your goal for the account is not early retirement, other accounts designed for specific goals may be better suited. For example, a 529 may be more appropriate for college savings, while a Custodial Roth IRA may offer greater benefits for teens who have begun earning income.
When will Trump Accounts start? Trump Accounts officially began accepting deposits on July 4th, 2026