Trump Accounts: A New Way to Save For Kids
If you’re looking for a powerful new way to jump-start your child’s or grandchild’s financial future, there's a new tax-advantaged tool on the scene that may be right for you.
Understanding Trump Accounts
Trump Accounts are tax-advantaged investment accounts established for children under age 18 to help families build long-term savings. An authorized individual may establish an account on a child's behalf. These accounts allow earnings to grow tax-deferred throughout childhood. Only one account may be established per child.
How Contributions Work
Trump Accounts can be funded from a variety of sources, including family members, employers, charitable organizations, and certain government contributions, subject to applicable rules and eligibility requirements. Contributions are subject to annual IRS limits, which may change over time. Notably, eligible children born between 2025 and 2028 may also qualify for a one-time government contribution to help jump-start their balance.
Withdrawals
To prioritize long-term growth, distributions before age 18 are highly restricted. Before that age, distributions are generally not allowed except for limited rollovers. Once the child turns 18, the child has two options:
- They can keep the account, in which case, the account becomes subject to traditional IRA rules.
- They can transfer the account. The balance may be rolled over to a traditional IRA or another eligible retirement account. In some cases, a rollover to an employer-sponsored retirement plan may also be permitted.
How to Open a Trump Account
All Trump Accounts must originate at the Treasury. Opening a Trump Account starts with an election process through the IRS—either by filing Form 4547 or using the online tool at trumpaccounts.gov. Reach out to your financial advisor to learn how this tool fits into your overall family wealth strategy.