Trump Accounts in 2026: How to Maximize Your Child’s Savings Plan

Saving for a child’s future is important. With rising living costs and market uncertainty, families need financial tools that offer stability and peace of mind. As the cost of living continues to rise, parents are understandably concerned about whether their child can afford college, buy a home, or simply stay afloat in a tough economy.

President Trump’s signature legislative initiative, the One Big Beautiful Bill Act (OBBBA), includes a provision to help address these concerns — Trump Accounts.

The idea behind Trump Accounts is to give every child seed money at birth, invested to grow over time, so that, by adulthood, the funds could help them pay for college, start a business, buy a home, or pursue other goals.

Starting in July 2026, a Trump Account can be opened for any child under 18 years old.  It’s a way for the next generation of Americans to build financial security and expand their opportunities.

Who is Eligible for a Trump Account?

The criteria for eligibility are straightforward:

• The child must be born between January 1, 2025, and December 31, 2028 to be eligible for $1,000 seed money.
• The child must have a Social Security number and valid birth certificate.
• Starting in 2026, parents can opt-in by checking a dedicated box on their federal tax return — likely on IRS Form 1040 — to signal their participation in the Trump Account program.

What are Trump Accounts and How do They Work?

For those who are eligible and willing, the federal government will open an account in their child’s name and deposit $1,000 into mutual funds or exchange-traded funds (ETFs) that track a qualified index, such as the S&P 500. Like any investment, the account’s value may go up or down depending upon market performance.

For additional contributions to Trump Accounts, the following guidelines apply:

• Contributions are prohibited until July 2026.
• Parents, guardians and other individuals can contribute up to $5,000 a year until the minor turns 18. 
• Employers may contribute up to $2,500, but that amount counts toward the $5000 overall limit.
• Contributions aren’t tax-deductible — so there will be no tax breaks for putting money in.
• The money grows tax deferred. That means you don’t owe taxes on any earnings while they are in the account.
• Withdrawals will be permitted once the owner turns 18. Like an IRA, any distributions taken for non-qualified expenses before the account owner turns 59 ½  — such as vacations, electronics, or general spending — may incur a 10% early withdrawal penalty in addition to regular income tax.

Are Trump Accounts Worth It?

From a practical standpoint, there’s no good reason to turn down $1,000 from the federal government. Anything is better than nothing. However, some parents may be wondering how Trump accounts differ from other tax-advantaged investments like traditional IRAs or 529 college savings plans. Here’s a point-by-point comparison of these investments:

So far, only limited information has been provided about how the Trump Accounts will actually work. The language of the OBBBA spells out some details but leaves many others open to IRS guidance. That means we’ll need to wait for the IRS to clarify all the rules and restrictions concerning Trump Accounts.

For families who qualify, the $1,000 federal contribution, along with potential support from employers, family and friends — represents a valuable opportunity to build savings. However, when it comes to making contributions from your own funds, it is important to evaluate whether a Trump Account, a 529 plan, a traditional or Roth IRA (if eligible), or another savings vehicle is the best fit for your child. A knowledgeable financial advisor can help you make that determination.

FAQ

When will I be able to manage my child’s Trump Account?

The current target for the government to open Trump Accounts is July 2026. Parents or guardians cannot currently go to a bank or investment firm and open this kind of account — but they are expected to receive instructions on how to access and contribute beginning in July 2026.

Who can open a Trump Account for a child?

Only a child’s parent or legal guardian may open a Trump account for them.

What rate of return will Trump Accounts deliver?

Because Trump accounts will be invested in stocks, it’s impossible to state what the rate of return will be for a given period. However, according to the White House, a Trump Account, with no additional contributions, could be worth roughly $6000 after 18 years. For an account receiving the maximum $5000 annual contribution every year, a Trump Account could be worth approximately $303,800 by the time the child turns 18. Again, these are just projections based on the past performance of markets and come with no guarantees.  

What happens to Trump Accounts after 2028?

Trump Accounts have no sunset date and will remain available indefinitely. Starting in July 2026, a Trump Account can be opened for any child not yet 18 years old. However, the $1,000 seed funding from the federal government will only be available for accounts opened for American children born between January 1, 2025 and December 31, 2028.

Prior to investing in a 529 College Savings Plan, you should compare the Plan with any 529 college savings plan offered by your home state or your beneficiary’s home state and consider, before investing, any state tax or other benefits that are only available for investments in the home state’s plan. Please read the Plan’s Disclosure Document which includes investment objectives, risks, fees, charges and expenses, and other information. You should read the Plan Disclosure Document carefully before investing. For this and other information on any 529 College Savings Plan, contact First Command or your Financial Advisor.

Please note that the availability of tax or other benefits may be conditioned on meeting certain requirements such as residency, purpose for or timing of distributions or other factors as applicable.

As with any investment, it is possible to lose money by investing in a 529 College Savings Plan.

First Command and its affiliates do not provide legal or tax advice. Information provided is for general purposes only and is not intended to be a substitute for specific individualized tax or legal advice. Where specific advice is necessary or appropriate, please consult a qualified tax or legal advisor.