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Key takeaways
A Trump account is an investment account for kids under 18. Families and others can contribute up to $5,000 per year, and employers may be able to contribute up to $2,500 per year toward that same limit.
Eligible children born between 2025-2028 may receive a one-time $1,000 federal deposit if a parent or guardian makes the required election.
Funds are generally inaccessible until your child turns 18, when the account converts into a traditional IRA.
A new way to save for kids is arriving in 2026. Unlike 529 plans or custodial Roth IRAs, it’s designed for long‑term retirement savings, not education or shorter‑term goals.
While some details may still change, this guide explains what is known about Trump accounts today and how it compares with other investment options.
What is a Trump account?
A Trump account is a new investment account specifically for children created as part of the One Big Beautiful Bill Act. The official name is a "530A IRA," but most people will call it a Trump account.
In simple terms, a Trump account is a tax-deferred retirement account that’s intended to start in childhood:
- It can be opened for any child under age 18 with a Social Security number.
- Contributions (up to $5,000 per year) are made with after-tax dollars and grow tax-deferred.
- During childhood, investments are restricted to low-cost U.S. equity index funds or exchange-traded funds (ETFs). Fees are capped by law.
- When your child turns 18, the account converts into a traditional IRA.
Because of these rules, Trump accounts work best for long‑term retirement savings—not short‑term expenses.
A Trump account is a way to help your child start saving for retirement as early as birth.
Who can open a Trump account?
Trump account eligibility is straightforward: any child under age 18 with a Social Security number can have a Trump account opened on their behalf. There are no income rules, and the child does not need earned income.
The account can be opened by:
- A legal guardian
- A parent
- An adult sibling
- A grandparent
Children born between January 1, 2025 and December 31, 2028 may also qualify for a one-time $1,000 contribution from the U.S. Department of Treasury, but that contribution is not automatic. An eligible adult must make an election for the child to receive it.
Only one Trump account is permitted per child.
How does a Trump account work?
The growth period (childhood)
From the time the account is opened through December 31 of the year before the child turns 18, special “growth period” rules apply.
- Annual contribution limit. Contributions cannot exceed $5,000 per child. This limit will be indexed for inflation in future years.
- Employer contributions. Employers may contribute up to $2,500 per year. That amount counts toward the $5,000 limit.
- Investments. Funds must be invested in eligible low-cost U.S. equity index funds or ETFs. Expense ratios are capped at 0.10%. You can’t choose individual stocks or active management strategies while the child is a minor. These limits are designed to keep costs low and support long‑term investing.
- Access. Distributions are generally not permitted during this period.
Conversion at age 18
On January 1 of the year the child turns 18, the Trump account automatically becomes a traditional IRA. At that point, your child becomes the account owner and may be able to choose from a wider range of investments, including stocks, bonds and more, depending on the brokerage.
Withdrawals
After age 18, traditional IRA withdrawal rules apply:
- Most withdrawals before age 59½ are taxed as ordinary income.
- A 10% early withdrawal penalty may also apply.
- Required minimum distributions (RMDs) begin at age 73 under current law.
How to open a Trump account
Trump accounts are expected to become available on or around July 4, 2026. The general process to open a Trump account may look like this:
- File IRS Form 4547 with your tax return or use the online portal at https://www.trumpaccounts.gov/ to register for the account and, if eligible, elect the $1,000 federal deposit.
- Activate the account once your registration is validated.
- Fund the account, staying within annual contribution limits. You’ll most likely be able to contribute via bank transfer, payroll deduction, check or transfer from a taxable brokerage account.
- Name a beneficiary who will control the account if the child dies. This is a critical step, as the beneficiary designation overrides your will or trust. If the child passes away before age 18, the account loses its IRA status and the balance (minus what was contributed after tax) becomes ordinary income for the recipient in that year.
Who can contribute to a Trump account?
Anyone may contribute to a child’s Trump account as long as total contributions do not exceed the annual limit of $5,000.
Employers may contribute up to $2,500 per year per employee’s child under a qualifying program, and those contributions are excluded from the employee’s taxable wages. Note that employer contributions generally count toward the annual limit.
Donations from philanthropic foundations may be available in the future.
What are the benefits of a Trump account?
A Trump account offers several features:
- Free federal money. Eligible children may receive a $1,000 one‑time contribution if an election is made.
- Employer and philanthropic leverage. Employers or foundations may offer contributions.
- Traditional IRA tax treatment. Contributions are made with after-tax dollars, earnings grow tax-deferred and withdrawals are taxed as ordinary income.
- Low fees by law. The 0.10% expense ratio cap can help protect smaller balances from being eroded over time.
- Long time horizon. Starting early may allow decades of tax‑deferred growth before RMDs begin.
What are the risks of a Trump account?
Here are a few tradeoffs to consider before opening a Trump account.
- Limited early access. Funds are generally inaccessible until age 18.
- Ordinary income taxation. Earnings, employer contributions and any federal deposit are generally taxed as income when withdrawn.
- Financial aid uncertainty. Treatment for financial aid purposes is still evolving.
- Legislative risk. Future changes to the law could affect account rules.
Should you open a Trump account?
Here’s a simple way to think about it:
- If your goal is long-term retirement savings for your child, a Trump account may fit.
- If your main goal is education funding, a 529 plan may be a better choice.
- If your child has earned income, a custodial Roth IRA is worth considering.
- If your employer offers contributions to a Trump account, that can add value.
As a rule of thumb, a Trump account may make the most sense if your child qualifies for the federal deposit or you have access to employer contributions. If not, it may still be worth considering alongside—not instead of—a 529 plan and Roth IRA.
Frequently asked questions about Trump accounts
What's the difference between a Trump account and a 529 plan?
A 529 plan is designed for education expenses, and qualified withdrawals are generally tax-free.
A Trump account is structured like a traditional IRA, so withdrawals are generally taxable as ordinary income after age 18.
If your priority is education funding, a Trump account may feel restrictive. Learn more about how 529 plans work and how they’re taxed.
What's the difference between a Trump account and a Roth IRA?
A custodial Roth IRA requires a child to have earned income. Contributions can be withdrawn at any time tax-free and earnings come out tax-free after age 59½ if rules are met. Learn more about a Roth IRA for kids.
A Trump account does not require earned income, but funds are generally inaccessible until age 18 and taxed as ordinary income on withdrawal. Additionally, the contribution limit for a Trump account is lower than the annual Roth IRA limit.
What happens to a Trump account when my child turns 18?
The account converts to a traditional IRA on January 1 of the year your child turns 18. At that time, your child gains full control and may be able to select from a wider variety of investments, including stocks and bonds, based on what the brokerage allows.
Contributions made during childhood can be withdrawn tax‑free. Future contributions are subject to traditional IRA limits.
When can the money in a Trump account be accessed?
Before age 18, withdrawals are generally not permitted. The exceptions include death of the beneficiary and qualified rollover contributions to an ABLE account (a tax‑advantaged account for individuals with qualifying disabilities).
How does a Trump account affect my taxes?
Personal contributions are made with after-tax dollars and don't lower your adjusted gross income. Employer contributions are excluded from your W-2 income.
Earnings grow tax‑deferred and will appear on your child’s tax return when withdrawn—not yours.
The bottom line on Trump accounts
A Trump account is a way to help your child start saving for retirement as early as birth. It’s not designed to take the place of a 529 plan or custodial Roth IRA. However, when used together with these other accounts, they can help give your child a strong financial start—as long as you’re comfortable with the long holding period and the fact that withdrawals are taxed as ordinary income.
Every family’s situation is different, and the right approach often depends on your long‑term goals. Talk with a financial professional today about saving for your child’s future.
Explore more
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