Planning for your child’s financial future may soon get a powerful boost from the federal government. Under a new pilot program, Trump Accounts are designed to help parents jump-start long-term wealth building for their children—starting literally at birth.

Here’s a clear, professional breakdown of how Trump Accounts work, who qualifies, and why families should pay close attention.

What Is a Trump Account?

Trump Accounts were established under the One Big Beautiful Bill Act (OBBBa), a sweeping piece of federal legislation aimed at reshaping tax policy and long-term economic incentives for American families.

A Trump Account is a government-backed, tax-advantaged investment account created for U.S.-citizen children born between 2025 and 2028 under a federal pilot program. Once enrolled, the government seeds the account with $1,000 of free money, giving families an immediate head start on long-term savings.

Parents can then continue building on that foundation with their own contributions over time.

How Enrollment Works

Parents make an income tax election on behalf of their newborn. While the IRS will issue detailed instructions on how to make this election, a few key requirements are already clear:

• The child must be born a U.S. citizen between 2025 and 2028

• The child must have a Social Security number at the time of election

• Once elected, the federal government automatically enrolls the child and funds the account with $1,000

This government contribution does not reduce how much families can contribute on their own.

Contribution Rules (Birth to Age 18)

Starting July 4, 2026, parents—and even grandparents or other relatives—can contribute to a child’s Trump Account.

Key contribution details:

• Up to $5,000 per year may be contributed (combined from all contributors)

• The $5,000 limit will be adjusted for inflation starting in 2028

• Contributions are allowed every year until the child turns 18

• No tax deduction is allowed for these contributions

While contributions are not deductible, the real advantage lies in how the money grows.

Tax Advantages During Childhood

Until the year the child turns 18:

• No withdrawals are permitted

• The account balance grows federal-income-tax-deferred

• No annual federal tax is owed on investment growth inside the account

This extended period of uninterrupted, tax-deferred growth can significantly increase the long-term value of the account—especially when contributions are made consistently.

What Happens at Age 18?

Beginning in the year the child turns 18, the Trump Account automatically converts into a traditional IRA.

At that point:

• Standard traditional IRA rules apply

• Future contributions and withdrawals follow existing IRA tax laws

• Distributions are taxed as ordinary income when withdrawn

In effect, the Trump Account becomes a retirement asset—one that may have already benefited from nearly two decades of tax-deferred growth.

Why Trump Accounts Matter

Trump Accounts represent a rare opportunity to combine:

• Free government funding

• Long-term tax-deferred growth

• Early financial planning from birth

For families who start early and contribute consistently, even modest annual contributions could translate into substantial retirement assets later in life.

Final Thoughts

If your child is born during the pilot window, a Trump Account could be one of the most impactful financial tools available to your family. While IRS guidance is still forthcoming, understanding the structure now allows parents to prepare, plan, and act quickly once enrollment opens.

In an era where financial security feels increasingly uncertain, Trump Accounts offer a structured, government-backed way to invest in your child’s future—starting from day one.