“Trump Accounts” are a newly introduced tax-advantaged retirement account for children, designed to help families build long-term wealth from birth. These accounts combine features of both Traditional and Roth IRAs and may serve as a powerful new child investment account option starting in 2026.
If you are evaluating ways to save for your child’s future — including retirement, long-term growth, or generational wealth planning — here is what you need to know.
Key Features
Eligibility
- Accounts may be opened for children from birth through December 31 of the year they turn age 17.
- Contributions may begin July 4, 2026.
- An “authorized individual” must open the account. This includes a parent, legal guardian, adult sibling, or grandparent.
Contributions
- Annual Contribution Limit: Up to $5,000 per year in after-tax dollars.
- Government Contribution: Eligible children born between 2025–2028 will receive a $1,000 government contribution.
- Employer Contributions: Up to $2,500 annually (treated as pre-tax contributions).
- Charitable Contributions: No stated cap; treated as pre-tax contributions.
Growth and Access
- Generally, no distributions are permitted until January 1 of the year the child turns 18.
- Distributions follow Traditional IRA taxation rules.
- Distributions taken before age 59½ may be subject to income tax and a 10% penalty unless an exception applies.
Frequently Asked Questions
Can a client open a Trump Account now?
An account may be established using IRS Form 4547 or through the website: https://trumpaccounts.gov/. However, contributions are not accepted until July 4, 2026.
Can a client open a Trump Account at Raymond James?
Our understanding is that Trump Accounts must initially be opened directly through the U.S. Treasury. Once established, the account may be transferred to another custodian. Raymond James/Banyan Wealth is currently evaluating whether these accounts will be offered in the future.
Will children automatically receive the $1,000 government contribution?
Eligible children born between 2025 and 2028 are expected to receive the $1,000 government contribution. However, the exact timing and mechanics of these deposits have not yet been fully clarified.
Does a child have to be born between 2025–2028 to open an account?
No. Any eligible child under age 18 may have a Trump Account opened on their behalf. However, only children born between 2025–2028 qualify for the $1,000 government contribution.
Who may contribute?
Family members, employers, and charitable organizations may contribute. For example, a small business owner could contribute to the accounts of employees’ children as a benefit.
How are contributions treated for tax purposes?
- Government and employer contributions: Treated as pre-tax contributions.
- Family contributions: Treated as after-tax contributions and not subject to income tax or penalty upon distribution of those specific amounts.
- The account custodian (not the account owner) will be responsible for tracking pre-tax versus after-tax contributions.
Are there income phase-outs or earned income requirements?
No. There are no income phase-outs or earned income requirements to contribute. Contributions to a Trump Account also do not reduce the contribution limits for Traditional or Roth IRAs, provided the minor has earned income for those accounts.
How are distributions handled?
Distributions are generally prohibited until age 18. Similar to a Traditional IRA, withdrawals prior to age 59½ may be subject to ordinary income tax and a 10% early withdrawal penalty unless an exception applies.
How Do Trump Accounts Compare to Other Savings Options?
Trump Accounts will join other established savings vehicles such as UTMA account accounts and 529 plan plans.
Each option serves a different purpose:
- Trump Accounts may be particularly attractive if a child qualifies for a government, employer, or charitable contribution. Even if parents do not plan to contribute regularly, the initial “free money” has significant long-term compounding potential and may provide meaningful retirement support decades later.
- 529 Plans are often the preferred vehicle when the primary objective is education funding. Contributions may qualify for state tax benefits, and distributions are tax-free when used for qualified education expenses. Additionally, up to $35,000 of unused funds may be transferred to a Roth IRA (subject to applicable rules).
- UTMA Accounts may appeal to families seeking maximum flexibility in investment options and contribution amounts. However, parents should remember that once a child reaches the age of majority, they gain full control over both UTMA and Trump Account assets.
Final Thoughts
Trump Accounts are another potential tool for long-term planning for children. As with any financial strategy, the appropriate approach depends on your family’s objectives, tax considerations, and overall financial plan.
If you have questions about Trump Accounts or would like to discuss the best way to save for someone under age 18, please contact Banyan Wealth. We would be happy to help you evaluate your options.
While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.
Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.