Trump Accounts: A New Way to Save for Your Child's Future
If you have kids under 18, there's a new savings option on the horizon that might be worth your attention — even if you're not sure you can contribute much (or anything) right now.
What Exactly Is a Trump Account?
A Trump Account is a special type of retirement account (like an IRA) but specifically for kids under 18. Starting with the 2026 tax year, you can open a Trump Account and let the money grow tax-deferred until your child turns 18.
Here's what makes them different:
You can contribute up to $5,000 per year (though contributions aren't tax-deductible)
The money is locked in until age 18 — no early withdrawals
Investments are kept simple and low-cost: think index funds like the S&P 500 with fees under 0.1%
The idea is straightforward: give kids a financial head start without complicated investment choices or high fees eating away at their future.
Yes, There’s Free Money Involved
Here's why we're bringing this to your attention now: there’s free money for early adopters.
The IRS Pilot Program:
If your child was born between January 1, 2025 and December 31, 2028, the IRS will contribute $1,000 to their Trump Account. That's right — free money from the government, no strings attached. You just have to elect to participate in the pilot program.
The Dell Family Pledge:
Michael and Susan Dell have pledged to deposit $250 into each account opened for children under 10. That's another boost without you lifting a finger.
Employer Contributions:
If you’re employed, your employer can also contribute up to $2,500 per year per employee to your dependent’s Trump account. The same is true for their teen if they have a job.
Add it up: that could be $1,250 (or more) in your child's account before you contribute a single dollar of your own.
Our Honest Recommendation
If you’ve been working with Personal Financial Services for a while, you know that we’re not your typical accounting firm. We're not going to pressure you into financial decisions that don't make sense for your family. But here's what we're seeing:
If you have a child who qualifies for the pilot program (born after December 31, 2024), we don't see a downside to filing the election form. Even if you never contribute another penny, that $1,000 from the IRS plus the $250 from the Dells is $1,250 growing tax-deferred for your child's future.
If your child is 10 or older and you have the financial means to contribute with the intention of letting it grow until they're 18, this could be a smart move.
Making the election doesn't obligate you to contribute. You can make this decision year by year when you file your taxes.
How to Open a Trump Account
We can file the election form with your tax return, which means it goes through electronically — much faster than getting caught in the IRS paper backlog..
If you prefer to wait and send in a paper form later, that's an option too.
One important note: You must elect to participate in the pilot program to receive that $1,000 for eligible beneficiaries. It's not automatic. It’s also not guaranteed that everyone will receive the funds — there is only a certain dollar amount set aside for the pilot program, with no guarantees that more will be allocated if it runs out.
The Practical Stuff You Should Know
Where will the money actually be held?
We're still waiting on final details. The law says accounts will be held with the U.S. Treasury, but firms like Schwab are working to become custodians. We expect more clarity after July 2026.
What if parents are divorced or separated?
Each child can only have one Trump Account. Parents will need to agree on who owns it — or unfortunately, work it out through the courts if agreement isn't possible.
What about gift taxes?
Currently, if you contribute your own money, you'll need to file a gift tax return. The tax community is hoping this gets fixed with a technical correction this year. Frankly, it's an unnecessary headache for families trying to do something good. The 529 Education Plans and ABLE Accounts started out with this issue as well and a technical correction was made. We hope for the same here.
What can you invest in?
The rules keep it simple: mutual funds or ETFs that track qualified indexes (like the S&P 500), don't use leverage, and have annual fees of 0.1% or less. This protects families from risky investments and excessive fees.
The Bottom Line
If you have young children, especially those born in 2025 or later, opening a Trump Account and electing to join the pilot program will get you free money that could grow into something meaningful by the time your kids are adults.
We're here to help you navigate the paperwork and make informed decisions — not to sell you on something that doesn't fit your life. If you have questions about whether this makes sense for your family, let's talk. That's what we're here for.
After all, we're not just your tax accountants.
We're people who genuinely care about your family's financial wellbeing.