Should I Open a Trump Account?

Authorized under the One Big Beautiful Bill Act, Trump Accounts are, in essence, traditional IRAs for minors, providing parents an opportunity to “jump start” long-term retirement savings for children under age 18 who are ineligible for other retirement savings programs because they do not have earned income. While parents can open accounts for their children now, no contributions are permitted until the program kicks off on July 4, 2026. The official app to manage the accounts was released in late May, and is currently available on major mobile app stores. 

While the contribution caps are modest, Trump Accounts offer families a new way to begin building tax-advantaged retirement assets much earlier than was previously possible — while also serving as a unique financial education tool, providing children and teenagers tangible exposure to investing, the power of compounding, and delayed gratification.

The program has generated significant interest among the media, financial professionals and public, with a reported five million children signed up as of mid-April, 2026.¹ Below, we discuss the most frequently asked questions we are receiving on Trump Accounts.

What are Trump Accounts?

As noted, Trump Accounts are essentially a new form of retirement savings account for minors. Available to U.S. citizens under age 18 with a valid Social Security number, the accounts function in many respects like traditional IRAs. As part of a pilot program, the federal government will deposit $1,000 into accounts opened for eligible children born between 2025 and 2028. In addition, parents, guardians, employers and others may collectively contribute up to $5,000 per year until the child turns 18.

The accounts are meant specifically for long-term retirement savings, not near-term support or education costs. Treasury oversees the program, including the investment parameters and the financial institutions authorized to administer these accounts. No withdrawals are permitted while the child is under 18. Once the beneficiary reaches adulthood, the account converts to a traditional IRA and becomes subject to the usual IRA distribution rules, including taxes, early withdrawal penalties and certain exceptions for qualified uses such as higher education, hardship or a first-home purchase. 

How do I open a Trump Account?

A Trump Account can be established by filing IRS Form 4547 or following the procedures at trumpaccounts.gov. If the $1,000 pilot contribution is elected, the request generally must be made by the person who expects to claim the child as a dependent for tax purposes; otherwise, the account may be opened by a legal guardian, parent, adult sibling or grandparent, subject to the program’s priority rules. The person who makes the election retains control of the account until the beneficiary turns 18, including authority over the investment options available during that period and the ability to appoint a successor. 

How is a Trump Account funded?

As noted, Trump Accounts can be funded with up to $5,000 per year before the child turns 18, plus a one-time $1,000 government contribution for eligible children born between 2025 and 2028; these numbers will eventually be adjusted for inflation. Anyone may fund an account, and federal, state and local governments and agencies, as well as charities, may make what are known as “general” contributions for a qualified class of beneficiaries — for example, children born in a certain zip code. Additionally, employers may make contributions of up to $2,500 for employees or children of employees. While the seed contribution and government or charitable contributions do not count toward the $5,000 limit, employer contributions do.

During the growth period, Trump Account funds may only be invested in “eligible investments” determined by the Treasury Secretary. These are, broadly, limited to passive mutual funds or ETFs that track an index of primarily U.S. companies. After the growth period, when the minor comes of age, investments are covered by the rules for IRAs.

What are the primary tax considerations?

Unlike the tax code for 529 plans, as written the tax code governing Trump Accounts does not state that gifts qualify for the annual exclusion. In general, the exclusion applies only to gifts of a “present interest,” meaning the beneficiary can benefit from the gift immediately. Because no withdrawals are allowed from a Trump Account before age 18, it is not yet clear whether contributions meet that standard, and Treasury has been asked to clarify the issue in future regulations. Unless the statute is changed, we must assume that gifts will use a portion of the donor’s $15 million transfer tax exclusion.

From an income tax standpoint, Trump Accounts work much like traditional IRAs. Contributions are made with after-tax dollars and are not tax deductible, the investments grow without current income tax, and withdrawals are generally taxed as ordinary income. That said, the taxable portion of a future withdrawal may depend in part on the source of the contributions, as some may have been taxed before entering the account.

So, should I establish one?

The strongest argument for a Trump Account is time. Because the account allows retirement savings to begin years before a child could contribute to an IRA, it creates the potential for decades of tax-deferred compounding. That said, families should consider the purpose of the gift. For example, a 529 plan account qualifies for the annual exclusion, tax-free accumulation and, if used as intended for education, tax-free withdrawal. More broadly, families should weigh not only tax treatment, but also the degree of flexibility, access and transfer-tax efficiency they want the gift to provide, relative to vehicles such as UTMA accounts, Crummey trusts and Section 2503(c) trusts, all of which offer differing combinations of control, access and tax advantages.

For many families, however, a primary benefit of a Trump Account may be as a tool for financial education, providing minors a new, tangible way to see how markets, compounding and delayed gratification work over time.

¹ https://www.cnbc.com/2026/04/15/trump-accounts