Signed into law last summer, the One Big Beautiful Bill Act introduced a new type of savings account known as Trump Accounts or 530A accounts. Beginning July 4, 2026, these new long-term investment accounts can be opened to help families build tax-advantaged retirement savings for children under the age of 18. With other savings vehicles like 529 plans already available, many families are wondering where a Trump Account may fit in their current savings plans.

Trump Accounts Overview

Trump Accounts are built on the Individual Retirement Account (IRA) structure and are meant to encourage long-term savings for children, but there are some notable differences from a traditional IRA.

Who is Eligible?

A Trump Account may be opened for U.S. children under the age of 18 with a valid Social Security number. In addition, U.S. children born between January 1, 2025 and December 31, 2028 are eligible to receive an initial $1,000 government-funded deposit, known as seed money, when the account is established.

What Are the Rules?

The period before the child turns age 18 is known as the “growth period,” and generally no withdrawals may occur during this time. The account is allowed to receive up to $5,000 in total contributions from parents, grandparents, individuals, and employers per year. Additional contributions can come from governments and charitable organizations, which do not count toward the $5,000 limit per year. Unlike other IRAs, the $5,000 contributions can be made without regard to earned income.

Individual contributions to Trump Accounts are not deductible but grow tax-free as long as they remain in the Trump Account. Account balances are required to be invested in low-cost U.S. stock index funds for the entirety of the growth period. As of May 2026, this is the only type of investment allowed inside Trump Accounts.

In the year when the child turns 18, the entire Trump Account is converted into an IRA in their own name. At that point, the account is subject to standard IRA rules.

The Pros and Cons of Trump Accounts

Before deciding whether to open a Trump Account, families should consider the potential benefits and limitations associated with this new savings strategy. 

One of the biggest benefits of a Trump Account is that it provides a vehicle for amassing significant tax-deferred savings prior to entering the workforce.  If a family opens a Trump Account for a child that is only ever funded with the $1,000 government seed money and earns an 8% annual rate of return, the account would grow to be about $4,000 by the time the child is 18. If the same Trump Account also receives yearly contributions of $5,000 (inflation adjusted) from family and friends in addition to the original seed money, the account would grow to be about $250,000 by age 18. 

Once the balance of the Trump Account is rolled into a traditional IRA, the child has the authority take withdrawals at any time. Families that save large sums in Trump Accounts should consider educating their children on the importance of compounding interest and investing for their futures to help prepare for the responsibility that comes with having access to this type of savings account.

Additionally, because IRAs are intended as long-term retirement accounts, withdrawals must generally wait until after the owner is age 59 ½ or older to be penalty-free, which limits the use of these funds. There are a few exceptions where an IRA owner can potentially avoid the 10% penalty, such as a qualified first‑time home purchase, certain education expenses, or unreimbursed medical expenses. Even in these cases, withdrawals are generally still subject to ordinary income tax if there is no tax basis in the account. 

Finally, since Trump Accounts can receive different types of contributions, including both pre-tax and after-tax contributions, families that set up Trump Accounts must track tax basis in order to prevent double taxation of any after-tax contributions.

Comparing Trump Accounts to 529 Plans

Many families are already familiar with 529 college savings plans, which remain a powerful tool for education funding. Compared to Trump Accounts, 529 plans offer tax‑free growth and tax-free withdrawals when used for qualified education expenses, along with expanded flexibility in recent years, including limited Roth IRA rollovers and use for K‑12 education and apprenticeship programs.

Trump Accounts differ in that they are designed primarily as long‑term retirement vehicles rather than education‑specific savings. They do not require earned income and benefit from the potential $1,000 government seed contribution. However, they also come with more limited investment options, less flexibility on withdrawal, and less tax-advantaged status. For some families, Trump Accounts and 529 plans may serve complementary roles in their household financial planning.

Closing Comments

Ultimately, the introduction of Trump Accounts adds another tool to the planning toolkit—not a one‑size‑fits‑all solution. Each family’s priorities, tax situation, cash‑flow needs, and long‑term goals are unique. Given the novelty of these accounts and the evolving guidance surrounding their use, families may benefit from evaluating how a Trump Account fits into their broader financial picture to make thoughtful, informed decisions that align with their goals for their children now and in the many years ahead.

For more information on Trump Accounts and how to apply, visit TrumpAccounts.gov, or contact a member of our Bartlett team to discuss whether a Trump Account aligns with your family’s financial goals.

DISCLOSURE:

This material provided by Bartlett Wealth Management (“Bartlett”) is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Nothing in these materials is intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Opinions expressed by Bartlett are based on economic or market conditions at the time this material was written; actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Bartlett, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.