Hot Topic - Trump Accounts
What’s a Trump Account and what do you need to know?
A Trump Account is a retirement account for America’s youth. Unlike a Traditional IRA, the Trump Account does not restrict that contributions can only be made if the account holder has earned income, because not too many toddlers have a job. Wouldn’t it be great to know your kids/grandkids have money socked away for retirement before they graduate high school? How cool!
Much-anticipated, Trump Accounts go live July 4, 2026!
Here’s the quick scoop:
This new Trump Account type will go live on July 4, 2026.
From the time your brand-new baby or grand-baby arrives on day 1, through the year they turn 18, is called the “Growth Period”.
On the account, the child will be designated as a “Beneficiary” during the Growth Period.
Contributions can only be made before the child’s 18th birthday.
Withdrawals can not be made during the Growth Period.
After the child attains age 18, they become the “Owner” of the account.
Like a traditional IRA, early withdrawal penalties apply before the “Owner” reaches age 59.5.
The account can be converted to a Roth account.
Trump Accounts can be set up by filing IRS Form 4547 or by visiting trumpaccounts.gov.
Who may apply for a Trump Account? Very specifically, there is an order of who qualifies as an authorized person that may set up the account for a beneficiary. The order is guardian, parent, adult sibling, or grandparent.
Trump accounts are first opened at BNY or Robinhood. They go live on July 4, 2026. After they are activated, for tracking purposes, they may be rolled over to another financial institution like Charles Schwab, Altruist, and other participating custodians.
Before the beneficiary reaches the year of their 18th birthday, various contributions can be made on the beneficiaries behalf and the maximum contribution amount is $5000 per year (indexed to inflation after the year 2027). An annual deadline of December 31, applies each year for eligible account contributions. The contribution is non-deductible for the person gifting. Contributions can be made by family and friends. Check with your employer to see if they will be offering employer contributions to Trump Accounts. Additionally, a $1000 Pilot Program is available to children born in 2025-2028.
Be aware, after the child reaches age 18, the Trump Account beneficiary becomes the owner.
The 18 year old Trump Account owner can use the funds however they like.
Penalties apply if withdrawals are made before age 59.5.
Before the child turns 18, parents and grandparents should talk with the minor and establish rules about the use of funds. The intent of the Trump Account is to provide children with a jump-start on their retirement investment accumulation.
After age 18, the Trump Account behaves much like an IRA. Several savvy investment solutions will be available to the beneficiary including Roth conversions; however, Roth conversion have taxable implications.
Prepare for your families financial future today.
About the Author
Marianne Martini Nolte, CFP®, provides tax-savvy wealth management for women and couples.
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