Trump Accounts were introduced as part of the One Big Beautiful Bill passed in July 2025.
Trump Accounts are intended to help children start investing early and benefit from long-term equity appreciation.
The United States Treasury will add $1,000 to Trump accounts for children born between 2025 and 2028.
When the child turns 18, the Trump Account generally follows Traditional IRA rules.
What is a Trump Account?
Trump Accounts were established as part of the One Big Beautiful Bill (OBBBA) to create a tax-advantaged savings and investment account for children under the age of 18. The parent or guardian opens and manages the account, while the child is considered the account owner. To be eligible, the child must be a U.S. citizen with a social security number. In addition, both parents or guardians must also have a social security number.
Who can Contribute to a Trump Account?
Children born between January 1st, 2025 and December 31st, 2028 are eligible for a one-time $1,000 contribution from the United States Treasury. Parents, guardians, relatives, employers, and other individuals can also also make combined contributions of up to $5,000 annually.
Employers can contribute up to $2,500 for an employee or the employee’s dependent, however employer contributions also count towards the $5,000 annual limit. The $1,000 one-time federal contribution does not count against the $5,000 limit.
Additionally, charities may also make qualified contributions to Trump Accounts if given a qualified class of account beneficiaries. For instance, on December 2nd, 2025, the Michael and Susan Dell Foundation announced they will pledge $6.25 billion to seed 25 million Trump Accounts with $250 each for children born before 2025 that do not qualify for the federal contribution. Philanthropic contributions do not count towards toward the $5,000 limit.
What can a Trump Account be Invested in?
Trump Accounts must be invested in certain exchange-traded funds (ETFs) or mutual funds that track an American equity index. For example, an ETF that tracks the S&P 500 index would be an eligible investment.
What Happens When the Child Reaches 18 Years of Age?
Upon age 18, the Trump Account generally follows Traditional IRA rules. Only the child is eligible to contribute to the account after reaching age 18, and they must have earned income to contribute.
What are the Distribution Rules for a Trump Account?
Children under the age of 18 are not able to take distributions under any circumstances. Once the child turns 18, the Trump Account generally follows Traditional IRA rules. Subject to certain exceptions, if the beneficiary takes a distribution before age 59 ½ , a 10% penalty will apply.
When will Trump Accounts Become Available?
Trump Accounts will not be available until July 4th, 2026. The Department of the Treasury as well as the Internal Revenue Service will be providing further guidance on Trump Accounts between now and then.
Parents and guardians will be able to file a new online form with the Internal Revenue Service (Form 4547) to establish a Trump Account.
Conclusion
While certain details of Trump Accounts are still being sorted out, Trump Accounts are likely to provide meaningful savings and growth potential for young children. Incorporating Trump Accounts into financial plans will be a key component to grow legacy value for the next generation.
Disclosure
RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.