We want to share an important update on a new federal savings and investment vehicle that may affect financial plans for families with children or grandchildren — Trump Accounts. Specific details can be found at https://trumpaccounts.gov/

 

📌 What Are Trump Accounts?

 

Trump Accounts are tax-advantaged, long-term savings and investment accounts created for children under age 18. The accounts were established by the One Big Beautiful Bill Act(signed into law in 2025) as a tool to help families begin building investment assets for children’s futures. 

Key points:

• Eligible children are those under age 18 with a valid Social Security number. 
• Children born between January 1, 2025 and December 31, 2028 will receive a one-time $1,000 federal seed contribution from the U.S. Treasury. 
• Although no continuing contributions are required, families, friends, employers, and others can contribute up to $5,000 per year per child. 
• Employer contributions may count toward the annual limit but are not taxable income to the employee. 

 

💡 How the Accounts Work

 

Trump Accounts are similar in structure to individual retirement accounts (IRAs) for minors:

• Funds will be invested through specific pre-approved government financial institutions, not through your personal broker-dealer.
• Investment growth is tax-deferred — earnings accumulate without annual tax until distributions are made. 
• Funds are typically invested in low-cost mutual funds or exchange-traded funds (ETFs) that track broad U.S. stock market indices, such as the S&P 500. 
• Withdrawals are generally permitted when the child turns 18, and can be used for goals like education, buying a home, or starting a business. 

 

🗓️ Timing and Eligibility

• Although established by law in 2025, Trump Accounts implementation continues into 2026, with systems for account opening and contribution processing beginning July 5, 2026. 
• Families will use IRS Form 4547 or a dedicated online portal to enroll and establish an account for an eligible child. 
• Older children under 18 can open accounts, but only those born in the specified window receive the full $1,000 government seed. 

 

📊 Financial Planning Considerations

 

Trump Accounts are designed to encourage long-term saving and investing from an early age:

 

Pros

• Automatic seed funding for eligible children. 
• Tax-deferred growth can enhance long-term accumulation. 
• Contributions from parents, family members, friends, employers and philanthropies may add value. 

Things to Consider

• Investment choices are restricted to broad U.S. equity index funds. 
• Accounts may behave differently than traditional education-only vehicles (like 529 plans) or retirement-focused accounts.
• Funds can be accessed without penalty when the child turns 18 for qualified expenses like education, 1 ^st time home purchase, or starting a business.
• Withdrawals may be subject to restrictions and would be taxed as ordinary income rates, with no additional penalties.
• Integration with overall family financial planning strategies (such as education funding and tax considerations) is essential.

 

 

🧠 What You Can Do Next

 

If you have children or grandchildren who might benefit from a Trump Account:

1. Identify eligibility based on birth year and citizenship status.
2. Assess how these accounts fit your long-term goals, especially in comparison with other savings tools (e.g., UTMA’s, 529 plans, Roth IRAs for minors).
3. Reach out if you’d like a personalized analysis of how Trump Accounts may integrate with your family’s financial plan.

 

As always, our goal is to help you navigate new financial products with clarity and strategic insight. Please contact us if you’d like to discuss whether Trump Accounts could play a role in your long-term financial planning.

 

Ronald E Rogers, RFC®
Registered Representative | Financial Professional
Freedom For Living Financial Services

Schedule A Meeting: https://calendly.com/rerogers