There’s been a lot of buzz around the new Trump accounts that are set to begin this July. You may be wondering what they’re all about and if they should be part of your family’s financial plan. Here’s a breakdown of the basics and how to decide if a Trump account makes sense for your family.
The Basics
Who are they for? Any child aged 0-17 can have a Trump account.
What are they invested in? Trump accounts are limited to investing in select index funds.
When can we open an account? Accounts will be activated on July 4, 2026. You can start the account process now, but contributions won’t begin until July. Contributions are limited to $5,000 per child annually.
Where do we sign up? Trump accounts are only offered through the website trumpaccounts.gov.
Will my child get free money? Any child born from January 1, 2025, through December 31, 2028, will receive $1,000 to jumpstart their account. This does not happen automatically, so families will need to apply to receive the funding. Older children may have an account, but will not receive the free seed money. Additionally, employers and philanthropists may make contributions to Trump accounts. For example, Michael Dell has pledged to contribute $250 to accounts for children under age 10 living in certain zip codes where the median household income is under $150,000.
How can the money be used? When the child turns 18, he or she will have full control of the account. The funds can be used for education, for a first home, or to start a business, but the real intent is for retirement savings. Withdrawals before 59 ½ can trigger penalties and taxes.
Does this make sense for my family? Trump accounts make the most sense for families who want to help their children get a head start on retirement savings and take advantage of those funds compounding over a long period of time. That said, each family situation is different, and this description only touches the surface of Trump accounts and what families need to know to fund their own goals while setting their children up for success. Other accounts for children, like 529s for college or UTMA custodial accounts, offer different structures for potential tax advantages or greater flexibility and parental control. A financial plan should be looked at as a whole, not just the pieces.
We can help with that! Reach out to our team at Benjamin F. Edwards for a complimentary consultation on your specific situation. Our office is conveniently located in downtown St. Charles at 50 S. 1st Street. Phone 630-313-7465.
This article is provided by Dan Hedge, CFP®, CKA® and Linnea Taylor, financial consultants at Benjamin F. Edwards & Co. in St. Charles, IL, and was prepared by or in cooperation with Benjamin F. Edwards & Co. The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. Benjamin F. Edwards & Co. does not endorse this organization or publication. Consult your investment professional for additional information and guidance. Benjamin F. Edwards does not provide tax or legal advice.
Benjamin F. Edwards & Co., Member SIPC and FINRA
5402139 – EXP: 04/30/2027
