Quick Take
Trump Accounts may become a useful way to jump-start a child’s long-term savings, but many of the rules are still taking shape. Early guidance suggests unique contribution limits, investment restrictions, and eligibility criteria that families will need to understand.
Eligibility for Trump Accounts extends to any child under age 18 with a valid Social Security number, with a special $1,000 pilot contribution available for children born between 2025 and 2028.
After age 18, Trump Accounts are expected to function like traditional IRAs, including potential eligibility for future Roth conversions. This transition may open valuable planning opportunities as a child enters adulthood.
When Congress created Trump Accounts as part of the One Big Beautiful Bill Act last year, most of what we could tell clients was theoretical. That's no longer true. The accounts launched on July 4, 2026, contributions are flowing, and Treasury has filled in most of the blanks that were missing when the first guidance came out. If you've been waiting for the dust to settle before deciding whether this fits into your family's savings plan, now is a reasonable time to take a closer look.
What Exactly Is a Trump Account?
A Trump Account is a specialized IRA opened for a child under 18, funded and managed on the child's behalf until they reach adulthood. It follows a different rulebook than a typical IRA during that stretch, called the growth period, covering how money can be invested, who can contribute, and when funds can come out.
Special Rules During the Growth Period
Investment Restrictions
This is one area where the picture has gotten a lot clearer. At launch, every contribution defaults into the State Street SPDR Portfolio S&P 500 ETF (SPYM), a low-cost fund tracking the S&P 500.
Four more index options, including funds from iShares and Vanguard, are approved and expected to become selectable in the coming months once Treasury finishes building out the allocation tools. Until then, money sits in the default fund regardless of which provider a family might prefer.
Custody runs through Bank of New York Mellon as Treasury's financial agent, with Robinhood serving as the initial brokerage and trustee.
Separate Contribution Limits
Trump Accounts feature their own contribution limits, separate from other IRA limits:
Pilot Program Contribution:
Children born from 2025 through 2028 may receive a $1,000 Treasury-funded contribution.
Annual Contributions:
Up to $5,000 per year (indexed for inflation) may be contributed by a parent, another authorized individual, or the child.
Employer Contributions:
Employers may contribute up to $2,500. These amounts:
Are not included in income, and
Do not count towards the annual $5,000 contribution limit.
Distribution Restrictions
The growth period is built for accumulation, not access. Withdrawals aren't allowed except in a narrow set of circumstances:
Trump Account → Trump Account rollovers
Trump Account → ABLE Account rollovers
Distribution of excess contributions
Distribution upon the beneficiary’s death
Who Is Eligible to Open a Trump Account?
Any child under age 18 may be the beneficiary of a Trump Account.
Children born after 12/31/2024 and before 1/1/2029 are eligible for the pilot program and its $1,000 contribution.
The child must have a valid Social Security Number before electing to open the account.
How Do I Open a Trump Account?
Trump Accounts will initially be created and held with the U.S. Treasury’s designated agent. Accounts may later be transferred to a preferred financial institution.
To open an account, an authorized individual must file IRS Form 4547, which can be submitted with the 2025 tax return.
By mid-2026, Form 4547 may also be submitted through an online account at trumpaccounts.gov or through the Trump Accounts App.
The form will be used both to open the account and to elect participation in the pilot program.
After submission, the Treasury Department (or its agent) will provide instructions on completing the account setup process.
What Happens After the Growth Period?
Once the beneficiary turns 18, most special rules expire:
The account becomes subject to traditional IRA rules.
Current guidance suggests Trump Accounts will likely be converted to traditional IRAs at that time.
Planning opportunity: Once converted, these IRAs may be eligible for Roth conversions, creating potential long-term tax benefits.
Final Thoughts
As noted at the outset, Trump Accounts have generated significant interest as a potential new avenue for parents to jump-start their children’s long-term savings. While the IRS has begun to outline how these accounts may function, many of the finer points—including investment options, contribution logistics, and post–growth period rules—are still being finalized. The framework shared so far offers helpful insight, but it remains early, and families should stay flexible as the regulatory picture continues to develop.
We’ll continue monitoring all IRS updates and Treasury guidance as they are released and will share further information to help you understand how these accounts may fit into your family’s planning strategy. As always, if you have questions or want to discuss how these evolving rules may apply to your situation, please let us know.
Contact us at 865-584-1850 or info@proffittgoodson.com
