You may start hearing more about “Trump Accounts” for kids as they roll out in 2026, especially around the $1,000 government seed contribution. Here’s the practical breakdown:
What Are Trump Accounts
• Custodial, retirement-style accounts created under the One Big Beautiful Bill Act
• Qualifying newborns receive $1,000 from the Treasury
• Funds grow tax-deferred; taxes are due upon withdrawal
Why Trump Accounts for Kids Are Getting Attention
• Free seed money
• Potential decades of compounding if left untouched
What To Be Careful About
• Very specific investment rules and fund choices
• Withdrawals are taxed as ordinary income and may face penalties
• Contributions can’t be pulled out tax-free like a Roth IRA
• Tax treatment depends on who contributed and how the money is used
How Trump Accounts Compare to Other Accounts & Savings Plans
• 529 plans are generally better for education savings
• Custodial Roth IRAs (once a child has earned income) are more flexible and tax-efficient
• Trump Accounts may fit families who’ve already maxed out other options and want to jump-start retirement savings very early
Key Takeaway
It’s a compelling idea with real benefits for some families, but far from a universal solution. As always, the headline matters less than how a strategy fits into a broader financial plan.
Have a question or want help understand the options for your kids? Contact us today to schedule a complimentary Q&A with one of our team members.
