Trump Accounts: What You Need to Know Now

The One Big Beautiful Bill Act (OBBBA) introduced Trump Accounts, a new tax-advantaged savings option for children. Although contributions won’t begin until July 4, 2026, understanding the rules now is important because these accounts are highly structured and timing matters.

What Is a Trump Account?

A Trump Account is a tax-advantaged account created for a child under age 18. During the child’s early years (the “growth period”), strict rules apply. After age 18, the account generally transitions to traditional IRA treatment, with some ongoing restrictions. Only one account per child is allowed, and it must be designated at creation.

Who Is Eligible?

A child must:

Be under age 18 in the year the account is established
Have a valid Social Security number

A $1,000 federal pilot contribution is available for U.S. citizen children born after December 31, 2024 and before January 1, 2029.

Contribution Rules

No contributions allowed before July 4, 2026
Annual contribution limit: $5,000 (2026–2027; indexed later)
Earned income is not required
Employers may contribute up to $2,500 per employee per year under a compliant program
Contributions are not deductible before the child turns 18

Investment & Withdrawal Limits

During the growth period:

Investments must be in low-cost, broad U.S. equity index funds
No leverage or cash holdings
Withdrawals are generally not permitted

After age 18, standard traditional IRA rules apply, including early-withdrawal penalties and required minimum distributions.

Why This Matters

Trump Accounts are designed for long-term planning—not flexibility. Waiting until 2026 to understand the rules could lead to missed opportunities and costly mistakes.