Trump Accounts: What Families Need to Know About the New Savings Opportunity for Children

Families now have a new option for building long-term savings for children: Trump Accounts.

Created under federal legislation enacted in 2025, Trump Accounts are a new type of individual retirement account (IRA) designed specifically for children. With tax-deferred growth, contributions from multiple sources, and a potential $1,000 federal contribution for certain children, these accounts may become another useful tool in a family’s long-term financial planning strategy. 

What Is a Trump Account? 

A Trump Account is a tax-advantaged retirement account established for the benefit of an eligible child.

An account generally may be established for a child who:

• Has not turned 18 before the end of the year the account election is made;

• Has a valid Social Security number; and

• Does not already have a Trump Account election on file.

  
  

Unlike a traditional or Roth IRA, the child does not need earned income for contributions to be made during the account’s growth period.

How Much Can Be Contributed?  

During the growth period, individuals—including parents, grandparents, relatives, and friends—may contribute to a child’s Trump Account.

Generally, contributions subject to the annual limit cannot exceed $5,000 per year, with inflation adjustments beginning after 2027. Employer contributions are generally limited to $2,500 annually and count toward the $5,000 limit.

Certain contributions, including the federal pilot contribution and qualifying contributions from governmental or charitable programs, do not could toward the $5,000 annual limit.

Because contributions may come from multiple sources, families should coordinate contributions to avoid exceeding applicable limits. 

Who Qualifies for the Federal Contribution? 

A one-time $1,000 federal pilot contribution is available for eligible children who:

• Were born in 2025, 2026, 2027, or 2028;

• Are U.S. citizens;

• Have a valid Social Security number; and

• Have an eligible election made on their behalf.

  
  

The $1,000 federal contribution does not count toward the general $5,000 annual contribution limit.

Certain children may also benefit from qualifying contributions made through governmental or charitable programs.

When Can the Money Be Used? 

Trump Accounts are intended for long-term savings. During the growth period, withdrawals are generally prohibited, with limited exceptions.

Beginning January 1 of the year the child turns 18; the account generally becomes subject to rules like those governing traditional IRAs.

At that point, distributions may be taxable, and a 10% additional tax on early distributions may apply unless an exception is available. Traditional IRA exceptions may allow funds to be used for certain purposes, including qualified higher education expenses or a first-time home purchase.

How Do You Establish an Account? 

An authorized individual, generally a parent or guardian, can establish a Trump Account by completing IRS Form 4547, Trump Account Election(s).

The election can be submitted with a federal income tax return or through an IRS Individual Online Account. Form 4547 can also be filed separately with appropriate; an amended income tax return should not be filed simply to submit the form.

How Does a Trump Account Compare? 

	Trump Account	529 Plan	Roth IRA
Primary Purpose	Long-term savings for a child	Education savings	Retirement savings
Earned Income Required?	No during the growth period	No	Yes
Tax Treatment	Tax-deferred growth; distributions generally subject to traditional IRA rules after the growth period	Tax-free growth and withdrawals for qualified education expenses	Tax-free growth and qualified withdrawals
Access Before 18	Generally restricted	Available for qualified education expenses	Contributions and certain qualifying deductions may be accessible
Control	Responsible adult manages the account while the child is a minor	Account owner generally retains control	Account belongs to the IRA owner
Federal Contribution	Eligible children may receive $1,000	No general federal seed contribution	No

Is a Trump Account Right for Your Family? 

A Trump Account may be worth considering for families who want to:

• Begin long-term investing for a child at an early age;

• Supplement existing education or retirement planning;

  Make gifts to children or grandchildren as part of a broader wealth-transfer strategy; or

• Take advantage of the $1,000 federal contribution when eligible.

  
  

However, a Trump Account may not be the first priority for every family. Families expecting to need the funds before the child reaches adulthood, those primarily focused on education expenses, or those who still need to strengthen their own retirement savings may have other planning priorities.

Trump Accounts do not also necessarily replace existing savings tools such as 529 plans. Depending on a family’s goals, multiple account types may serve different purposes within the same financial plan.

How Griffin & Furman Can Help 

The rules surrounding Trump Accounts are new and continue to develop. Griffin & Furman can help families evaluate how a Trump Account may fit within their broader tax, retirement, gifting, and wealth-planning strategies.

If you have questions about eligibility, contributions, tax considerations, or how a Trump Account compares with other savings options, contact our team to discuss your family’s circumstances.

Written By: Stephen Griffin, CPA, PFS