Hi everyone, my name is Kayden Besher with Burgdorf Wealth Managers.
Today, I want to talk about a new savings tool that you may be hearing more about: Trump Accounts.
These accounts were created to help children begin building long-term savings early in life.
A Trump Account can generally be established for an eligible child under age 18 who has a valid Social Security number.
For eligible U.S. citizen children born between January 1, 2025, and December 31, 2028, the federal government will make a one-time $1,000 contribution into the account.
If you are a parent, guardian, or other authorized individual, you can request the account by filing IRS Form 4547 with your tax return, or you can visit TrumpAccounts.gov for more information.
Parents, relatives, and other contributors may be able to contribute up to $5,000 per year, with regular contributions allowed starting July 4, 2026.
Employers may also be able to contribute up to $2,500 per year tax-free through an employer contribution program, with those contributions counting toward the $5,000 annual limit.
But this is important: a Trump Account is not the same as a regular savings account.
The money is generally invested for long-term growth, with investments limited to low-cost funds or ETFs that track broad U.S. stock indexes.
Withdrawals are restricted before age 18. After that, most of the special Trump Account rules no longer apply, and traditional IRA rules generally apply.
So while these accounts may be helpful, they should be considered alongside other planning tools, such as 529 plans and custodial accounts.
The key is to look at this account in context.
How does it fit with your family’s goals for education, future needs, stewardship, and legacy?
If you have children or grandchildren who may qualify, contact the office to schedule a meeting. We can help you understand the rules and think through how this new account may fit into your broader family plan.
Sources:
IRS guidance says Trump Accounts are a new type of IRA for eligible children and describes the $1,000 pilot contribution for U.S. citizen children born from Jan. 1, 2025 through Dec. 31, 2028. https://www.irs.gov/trumpaccounts
4 million children have been signed up for Trump Accounts with 1 million claiming the $1,000 pilot program contribution. IR-2026-42, March 31, 2026. https://www.irs.gov/newsroom/4-million-children-have-been-signed-up-for-trump-accounts-with-1-million-claiming-the-1000-pilot-program-contribution
Investor.gov notes that regular contributions can begin July 4, 2026, investments are limited to low-cost broad U.S. equity mutual funds or ETFs, and traditional IRA rules generally apply after age 18. https://www.investor.gov/introduction-investing/investing-basics/investment-accounts/tax-advantaged-accounts/trump-accounts
Fidelity summarizes the contribution cap, withdrawal restrictions, and how Trump Accounts compare with 529s and custodial accounts. https://www.fidelity.com/learning-center/personal-finance/trump-accounts