Trump Accounts are a new type of custodial-style traditional IRA created under federal law to help families save and invest for a child’s future. These accounts are owned by the child but administered by an adult, typically a parent or guardian, until the child reaches age 18. Trump Accounts are designed to provide long-term, tax-deferred growth using low-cost, broadly diversified investments, with strict rules on contributions, withdrawals, and investments.
A Trump Account is established for a minor and designated as such at the time of opening, according to IRS guidance. The child is the legal owner and beneficiary of the account, while an authorized adult manages it on their behalf. The program is scheduled to launch on July 5, 2026, with initial accounts created and administered by the U.S. Treasury. After launch, accounts may be rolled over to approved financial institutions offeringTrump Accounts products.
Think of these as "starter IRAs”. Unlike standard retirement accounts, these don’t require a child to have a paycheck to get started. They operate on traditional tax principles, meaning earnings remain tax-deferred while allowing multiple people to contribute to a child’s long-term security.
What are the key features of Trump Accounts?
Trump Accounts operate under a unique set of federal rules, including:
• Custodial ownership: The account is owned by the child, but controlled by a legal guardian until age 18.
• No earned income requirement: Contributions can be made even if thechild has no income.
• Tax-deferred growth: Earnings are not taxed until withdrawn.
• Restricted withdrawals: Generally, no distributions are allowed before age 18.
• Limited investments: Funds must be invested in low-cost index mutual funds or ETFs, with a strict expense ratio cap and no leverage.
Who is eligible for a Trump Account?
A Trump Account may be opened for any child under age 18 who has a valid SocialSecurity number. Only one Trump Account is permitted per child. Certainchildren born between January 1, 2025, and December 31, 2028, may qualify for a one-time $1,000 government seed contribution, subject to Treasury and IRSelection requirements.
What are the Trump Accounts' contribution rules?Trump Accounts allow contributions from several sources, including individuals, employers, and charitable organizations. The annual $5,000contribution limit per child is designed to grow alongside inflation after2027. This cap applies only to standard contributions. Government and charitable funds can be added to this amount without penalty. To ensure the best tax outcome, keeping a clear record of all contributions is essential.
What happens once a child turns 18?
Once the child reaches age 18, the TrumpAccount may continue under traditional IRA rules or be rolled over into another eligible retirement account. Standard traditional IRA rules, including taxation of withdrawals and potential early withdrawal penalties, generally apply after this transition.
What is the purpose of the Trump Account?
The primary purpose of Trump Accounts is to encourage early, long-term investing for children using a regulated, low-cost retirement account framework. By streamlining investment options and keeping savings tucked away, the program acts as a dedicated tool for families looking to secure a child’s financial head start.
