Trump Accounts: What families need to know

Have you heard about the new Trump Accounts? You may be wondering what they are and if they fit into your family’s financial plan. Here’s what you need to know.

What is a Trump Account?
Trump Accounts were created with the One Big Beautiful Bill (OBBB) and officially became available on July 4, 2026. They are a new type of savings account designed to help children begin investing at an early age. While they share similarities with individual retirement accounts (IRAs) and education savings plans, Trump Accounts have their own unique rules and benefits.

Who is eligible?
Before opening an account, it’s important to understand who qualifies. Trump Accounts are available to children who are under 18 and are U.S. citizens with a work-authorized Social Security number. Any parent, legal guardian, grandparent, or adult sibling may open an account on a child’s behalf. The account must be established before the child turns 18.

How do Trump Accounts work?
Once an account has been established, the next question is how contributions and investments work. Similar to traditional retirement accounts, Trump Account investments grow tax-deferred, meaning earnings can compound over time without being taxed each year. Because Trump Accounts are intended to be long-term investment vehicles, that additional time in the market can make a significant difference.

How much can you contribute?
Many families naturally wonder how much money can be added each year. Beginning in 2026, total annual contributions are limited to $5,000 per child. This limit is expected to be adjusted for inflation after 2027. Employers may contribute up to $2,500 annually, which counts toward the overall $5,000 annual contribution limit.

Additionally, certain eligible children will receive seed contributions in their accounts:

• The U.S. Treasury will contribute $1,000 to children born between 2025 and 2028.
• The Michael & Susan Dell Foundation will contribute $250 to the first 25 million children who are 10 or younger and living in zip codes with median incomes below $150,000.

Who can contribute?
Contributions can come from multiple sources, including parents, grandparents, other family members, and employers. This flexibility allows many people to help build a child’s financial foundation and support long-term goals.

When can the money be used?
Funds generally cannot be withdrawn until Jan. 1 of the year the child turns 18, except in limited circumstances permitted under the law. Once the account owner reaches age 18, the account follows the withdrawal rules applicable to IRAs. In general, distributions taken before age 59½ may be subject to ordinary income tax and a 10% early withdrawal penalty, unless an exception applies.

How do you open a Trump Account?
If your child qualifies, getting started is relatively straightforward. Families can open a Trump Account by filing IRS Form 4547 with their federal tax return or through the Trump Accounts app. Once the account has been established, you can activate it and begin making contributions online or through the app.

We offer guidance on tax-advantaged saving
While the rules are still new, Trump Accounts are another tool available to families who are saving for a child’s future. Are they the right fit? That depends on your family’s goals and how they compare with other options, such as Roth IRAs and 529 plans.

Key takeaways:

• Trump Accounts are tax-advantaged investment accounts for U.S. citizens under 18.
• Contributions are invested in diversified U.S. stock funds with compounding returns.
• Family members, employers, and friends can work together to build the child’s savings.

At Gentry Private Wealth, we’d be happy to help you decide if Trump Accounts make sense for your family’s financial plan.

Contact us

Sources: Trump Accounts official website and related White House Press Release.