A new savings and investment option for children called “Trump Accounts” is being introduced to help families build long-term financial security for their kids. These accounts were created under the One Big Beautiful Bill Act signed into law in 2025 and are designed to give children a financial head start from birth. For many families, Trump Accounts provide a structured way to teach kids about saving and investing early, while giving them an initial boost from the government and potential growth over decades
What Are Trump Accounts?
Trump Accounts are tax-advantaged IRAs, set up in a child’s name and managed by a parent or guardian until the child turns 18. They work a bit like a long-term savings plan tied to the stock market. Rather than being just a bank savings account, the money is invested in low-cost stock index funds. Because they are invested in broad stock market index funds, the accounts aim to benefit from long-term market growth, although like any investment, returns are not guaranteed. Unlike an IRA, which requires earned income to contribute, Trump accounts do not have such requirements.
Who Is Eligible?
Any U.S. child under age 18 with a valid Social Security number can have a Trump Account opened for them. On top of that, eligible children born between January 1, 2025, and December 31, 2028 will receive a one-time $1,000 seed contribution from the federal government. Parents, family, friends, and even employers can contribute up to $5,000 per year per child. Employers may contribute up to $2,500 of that without the amount counting as employee income. Investment earnings grow tax-deferred, meaning you don’t pay taxes on gains each year while the money stays invested. Funds must be invested in a diversified U.S. stock market index fund (like the S&P 500).
When Can You Use the Money?
Trump Accounts are meant for long-term growth. The money can’t be withdrawn until the child turns 18. Once the child is an adult, the account functions similarly to a traditional individual retirement account, meaning withdrawals may be taxable and penalties could apply for early withdrawal before standard ages unless used for approved purposes like education, starting a business, or buying a first home. The account can also be converted into a Roth IRA once the child reaches age 18.
How to Start One
The Treasury Department will create and administer the initial account. You can elect to open Trump Accounts for your eligible children using the newly created IRS Form 4547, which can be done while filing your taxes or through an online portal that will be available by summer 2026. Continue to check TrumpAccounts.gov for the latest information. If you are interested in learning more, please reach out to one of your trusted advisors at Burke CPAs and Advisors or Concentric Wealth Management.