By: Catherine Martinez
The White House recently announced a new savings initiative, Trump Accounts, to help children jumpstart their savings journey. All babies born between January 1, 2025, and December 31, 2028, are eligible to open a Trump Account with $1,000 in seed money from the U.S. Treasury. All funds are invested in low-risk index funds to pursue a long-term growth strategy. Trump Accounts will officially begin on July 5, 2026, in celebration of the 250th birthday of the U.S. What a great way to celebrate, by gifting American children financial independence!
Why You Should Consider Opening a Trump Account for Your Kids
Trump Accounts offer a unique opportunity to teach your children about the importance of saving, investing, and delayed gratification. By using the online portal, children will be able to make real-time investments with the help of a parent, motivating early entrepreneurship, money management, and smart saving strategies. By opening an account, you will give your children one more opportunity to build financial success and learn about personal finance.
Quick Facts About Trump Accounts
- How to contribute: After the original $1,000 investment, account holders are eligible to make up to $5,000 in contributions per year through a qualified financial institution. Children will be able to check their balance and make regular contributions through an app on a smartphone.
- All kids are eligible: While babies born between 2025 and 2028 are the only ones eligible to receive the $1,000 in starting money, all children under the age of 18 are eligible to open their own Trump Accounts and make their own contributions. All that’s needed for eligibility is a Social Security number.
- When and how funds can be used: Account holders are eligible to withdraw money after their 18th birthday without penalties, but they are also free to keep making deposits and letting the money grow until they choose to make a withdrawal. Funds can be used for whatever the account holder desires—education, business start-up costs, or putting a down payment on a house.
- Minimum projected growth: If an account holder doesn’t make any contributions to his or her Trump account other than the initial investment of $1,000, it is projected to grow to $6,000 by the child’s 18th birthday, $15,000 by age 27, and $271,000 by age 55.
- Maximum projected growth: If an account holder makes the maximum amount in contributions of $5,000 per year, it is projected to reach $271,000 by age 18, $741,000 by age 27, and $13 million by age 55.
- Workplace benefit: Employers may choose to contribute to Trump Accounts as part of employee benefit plans, with a maximum contribution of $2,500 per year.
How to Open a Trump Account
When filing tax returns, families may fill out the new IRS Form 4547 or use the online portal, which will be available in the summer of 2026 at trumpaccounts.gov. Once the account is set up, the opening $1,000 contribution is automatically invested in the stock market.
What Makes Trump Accounts Different Than a 529 Savings Plan
Trump Accounts and 529 plans have a similar goal—to invest in the futures of American children. Here are a few things that distinguish them from the other:
- Purpose: Trump Accounts are a way to launch children into saving to build wealth or eventual retirement, with flexible uses after age 18. 529 plans can only be used for educational costs, including K-12 and college tuition, professional and technical schools, books, and other related expenses.
- Taxes: For Trump Accounts, tax is deferred until withdrawal, then taxed as ordinary income, though there are exceptions. 529 plans provide tax-free growth, but withdrawals are not taxed when used for education.
- Contribution limits: Trump Accounts have a lower contribution limit, allowing families to contribute up to $5,000 per year. While 529 plans generally have much higher limits depending on the state, often $300,000 lifetime, or $19,000 per year.
- Investment strategy: Trump Accounts are automatically invested in the U.S. Stock Market, but 529 plans offer more choices, often including diversified and age-based portfolios.
- Flexibility: Funds in Trump Accounts are not available for use until the account holder turns 18, but they offer more flexibility after the minimum age has been reached. 529 plans are available for use at any age for qualified educational expenses, including K-12 tuition and fees.
Both savings plans offer advantages to families, so consider taking advantage of both options will help set your child up for financial success.
ABOUT THE AUTHOR
Catherine is a full-time copywriter for a nonprofit organization and a freelance writer. She spends her days writing, chasing toddlers and learning how to master her money. Catherine lives in Houston, Texas, with her husband and their two young children.
