The One, Big, Beautiful Bill Act, signed into law on July 4, 2025, established a "Trump Account," also known as a 530A or "Invest in America" account. For tax years after December 31, 2025, a tax-favored investment account may be established for children under the age of 18. The accounts initially allow no more than $5,000 to be contributed on the child's behalf. Employers may contribute $2,500 of the $5,000 limit. These amounts will be indexed for inflation after 2027. While contributions are not deductible, earnings grow tax-deferred. Distributions are generally not allowed from the account until the child turns 18. Starting January 1 of the year in which the child turns 18, the account transitions to a traditional Individual Retirement Account (IRA).
For children born after 2024 and before 2029, the U.S. Government will contribute an initial $1,000 to a child's Trump Account under a pilot program.
It is estimated that, using average stock market returns, a Trump Account balance for a baby born in 2026 will be:
- $303,800 by age 18 and $1,091,900 by age 28 if maximum contributions are made each year.
- $5,800 by age 18 and $18,100 by age 28 if no contributions are made.
Source: whitehouse.gov
Our calculations show that if a child born in 2026 receives the $1,000 under the pilot program, an annual contribution of $566 is made on behalf of the child until age 18, and the investments average an 8% return, at age 65 the child will have an account balance of $1 million, if no distributions are made before age 65. For a total investment of $10,188 over 18 years, you could set up your child to be a millionaire at retirement.
How to Establish the Account
Registration will open in May 2026. A Trump Account is established by filing Form 4547 with your individual income tax return. The one-page form provides basic information about your child necessary to establish the account. After filing the form, a authentication process is required to activate the account. Visit the online portal, trumpaccounts.gov, in mid-2026 for more details.
Is a Trump Account the Best Savings Option?
While the $1,000 pilot program is a great savings start for qualified children, distributions from the account will be subject to IRA rules. As money is withdrawn, proceeds will be subject to tax and subject to a 10% early withdrawal penalty, unless an exception applies. Exceptions to the 10% penalty include distributions for a first-time home purchase or higher education expenses, among others. Also, any post-tax contributions to the account can de deducted against any distributions. A traditional brokerage account, Roth IRA, or 529 Education Savings Plans may offer more flexibility to families. We recommend speaking with a financial advisor and your tax advisor before choosing a savings strategy for a child.
In the News
https://www.foxbusiness.com/politics/white-house-unveils-trump-accounts-children-6-25-billion-dell-investment
https://www.usatoday.com/story/money/2025/12/02/how-to-claim-trump-accounts-for-kids-newborns/87564149007/
https://www.forbes.com/sites/teresaghilarducci/2025/12/02/trumps-child-accounts-what-dells-6b-gift-fixes-and-cant-fix/
