If you or someone you know welcomed a child in 2025 (like my family did!), there’s going to be a new government-backed savings opportunity you’ll want to know about that could give your child a meaningful head start toward their financial future.
It’s called a Trump Account, and it’s different from anything we’ve seen before.
So what is a Trump Account?
In simple terms, a Trump Account is a new tax-advantaged investment account for children created through recent federal legislation. It’s designed to help kids start building financial assets from a very young age.
Here’s the key idea: for every U.S. child born between January 1, 2025, and December 31, 2028, the federal government will seed a Trump Account with $1,000, essentially a starter investment that belongs to the child.
Parents, grandparents, other family members, friends, and even employers can contribute additional after-tax money, up to $5,000 per year, into the account.
That money is invested in low-cost, broad U.S. stock index funds, meaning the funds grow tax-deferred over time.
You can learn more or begin the process at trumpaccounts.gov, the official government portal for this new program.
Important Dates & What’s Expected
- Eligibility: Parents or guardians of kids born in 2025–2028 can make an election to open a Trump Account beginning now, potentially when filing your 2025 taxes on form 4547 or online via instructions from https://www.trumpaccounts.gov/ once things go live
- Contribution Start: Actual contributions to the account (including the government seed money) could begin on July 4, 2026, but wouldn’t expect anything sooner.
- What Happens at 18: When the child turns age 18, it sounds like the account is going to function like a traditional IRA, meaning the funds are theirs, tax-advantaged growth continues, and withdrawals are governed by standard retirement-account rules.
What We Don’t Fully Know Yet
Because this program is brand new, there are still details being clarified:
- Whether the account can ever convert to a Roth-style tax treatment later (no official guidance yet).
- Whether there will be limited, if any, qualified uses before age 18
- Will there be any flexibility after the age of 18? Or will they follow Traditional IRA rules?
- The exact process and timeline for transferring the account to a preferred brokerage or financial institution. This is expected to be possible once the accounts are live, but not sure of the exact rules.
So while the framework and benefits are pretty clear now, some operational details are still forthcoming, and we’ll learn more as the regulations and platform launch.
How Trump Accounts Compare to Other Options
Once you understand Trump Accounts, it helps to see how they fit with other ways parents often save for kids:
Trump Accounts
- Owned by the child; custodial until age 18.
- Starts with a $1,000 federal seed contribution for eligible children.
- Tax-advantaged growth like a traditional IRA.
- Can receive up to $5,000 in annual contributions from family and others.
- No access until 18 (with few exceptions).
UTMA/UGMA Accounts
- Custodial accounts anyone can open for a minor.
- No tax benefits; all gains are taxable.
- Once the child turns the age of majority (18–21 depending on state), they get full control.
- No contribution limits or investment limits
529 College Savings Plans
- Tax-advantaged for education costs (tuition, books, etc.).
- Can change beneficiary within family.
- Limited to education-related qualified expenses (though penalties apply for non-qualified).
- Can convert into a Roth IRA, up to $35,000, if certain stipulations are met
Brokerage Accounts Held in Parent’s Name
- Offers flexibility for any goal.
- No tax shelter for growth unless managed through other strategies.
- Helpful if you want to gift investments once your child is older.
- Account structure with the most flexibility when it comes to timing and what the funds can and can’t be used for
I don’t think a single account is “perfect.” Each serves different purposes. Trump Accounts offer a powerful head start on long-term growth, but planning with a mix of strategies can help you balance education goals, lifestyle planning, and legacy intentions.
How Our Family Is Thinking About It
My wife and I plan to start with a Trump Account for our child as soon as it’s available. It’s free money from the government and a great way to begin long-term investing at birth.
We’ll likely supplement that with a UTMA so we also have flexibility for non-retirement uses (like education, early adulthood needs, or even a first car).
Down the road, if we decide on college savings, we’ll layer in a 529. And if the UTMA grows large enough that we aren’t sure we want our child coming into much more money than that when they become an adult, a personal brokerage account may be the next step to make sure the first wave of funds were used “wisely”.
The goal isn’t to choose just one tool; it’s to choose the right mix for our family’s values and goals.
Bottom Line
If you have a child born in 2025 (or know someone who does), this is one of the most exciting savings opportunities to hit in years. These accounts are designed to help kids grow money early and give them a valuable financial foundation for life.
If you’re ready to think about how this fits into your bigger financial picture, saving for college, balancing cash flow, inheritance planning, or multi-generation goals, let’s talk.
This isn’t just about a new account. It’s about helping set the stage for a lifetime of sound financial decisions.
Additional Disclosures: The material contained in the newsletter is for informational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation, or needs of individual investors. This material is not intended to provide and should not be relied on for tax advice. Any information contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated. The information provided has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and does not purport to be a complete analysis of the material discussed. All examples are hypothetical and are for illustrative purposes only, individual results will vary. Securities Offered Through Valmark Securities, Inc.Member FINRA, SIPC Investment Advisory Services Offered Through Valmark Advisers, Inc. a SEC Registered Investment Advisor 130 Springside Dr., Akron, Ohio 44333-2431*1-800-765-5201 Spearman Financial Services is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc