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The One Big Beautiful Bill Act created a new tax-advantaged savings and investment account for children called a Trump Account. Trump Accounts could give families a new way to save for their children's futures. Here's what you need to know.
What is a Trump Account? A Trump Account is an investment account for children, sponsored by the U.S. government. An investment account lets you hold assets like mutual funds or exchange-traded funds, also known as ETFs, a way to potentially share in the profits of companies on the stock market. Over time, investing has the potential to grow your money. Trump Accounts are intended to provide a financial foundation for new generations. In most cases, money added to a Trump Account can’t be withdrawn before the child turns 18, when the account converts into an individual retirement account, or IRA.
Who are Trump Accounts for? Trump Accounts are for all children under 18 who have a social security number. Parents or legal guardians who declare a child as a dependent on their taxes can open an account for their child starting in 2026.
Why should I open a Trump Account for my child? Money in a Trump Account is invested in a mutual fund or ETF that tracks the U.S. stock market, where it could potentially grow tax-deferred over time. Though investments in stocks can also lose value, historically the U.S. stock market has gone up over the long term.
Where does money in a Trump account come from? Every baby born a U.S. citizen from January 1, 2025 to December 31, 2028, will be eligible to receive an initial $1,000 deposit into the account from the U.S. government. Parents, family, and others can also add up to a total of $5,000 per year to the account. All other children under the age of 18 who have a social security number can have a Trump Account and receive contributions from parents, family, and others, but only children born between 2025-2028 are eligible for the one-time $1,000 contribution from the government. In most cases, money contributed to a Trump account can't be taken out before the child turns 18, when the account converts into an individual retirement account.
How much could money invested in a Trump Account grow? To get a sense of the growth potential, imagine a family invested the full $5,000 a year in a Trump Account for the entire 18 years. Assuming a 2.3% inflation rate per year on the contributions and a reasonable investment growth rate of 6%, by age 18, the child's account would hold around $191,000. The year the child turns 18, the account will be converted to a traditional IRA, meaning it could continue to accumulate potential gains on a tax-free basis. Even if the beneficiary made no additional contributions to the account, by the time they reached age 60, the account could be worth more than $2.2 million. Note that withdrawals from IRAs prior to age 59½ can trigger penalties and taxes, so be sure to consult with a tax professional for details.
And finally, how do I sign up? Starting in 2026, when you file your taxes for 2025, you can fill out a form to start the account opening process. For the latest information about Trump Accounts, visit trumpaccounts.gov. And to learn more about how to get started with investing, check out schwab.com/learn.