Trump Accounts: A New Way to Invest in Children’s Futures

A trader is seen moments before U.S. President Donald Trump rings the opening bell of the New York Stock Exchange (NYSE) on July 6, 2026, from the Oval Office. This event marks the celebration of the first day of trading for Trump Accounts.

Americans now have a novel way to invest in their children’s futures: Trump Accounts have been launched. Approved by Congress as part of the One Big Beautiful Bill Act, these accounts resemble retirement plans but are tailored for children. They aim to support kids beginning their adult lives.

How Trump Accounts Work

Trump Accounts allow any American citizen under 18 years to own an account. These accounts invest money in an index fund tracking the stock market. Upon turning 18, the funds can be used for educational expenses or purchasing a house. They can also be used for other purchases but involve a tax penalty.

These accounts operate as a digital funding ‘bucket’ that various entities can contribute to, including families, philanthropists, employers, and even the government. Family contributions are made using after-tax dollars, while contributions from employers or the government are pre-tax. Taxes on the investment’s growth are payable only upon withdrawal.

Considerations for Signing Up

Federal Government Contribution

Financial advisors suggest that if your child is born between 2025 and 2028, opting for a Trump Account is advisable. The account automatically receives a $1,000 seed contribution from the federal government. With an assumed 8% rate of return, this initial contribution could grow to nearly $4,000 by age 18, though taxes will apply to the growth.

Additional Donations Eligibility

Children born outside this specified period are not entirely excluded from benefits. Kids under 11 could receive a $250 donation due to $6.25 billion contributed by Michael and Susan Dell of Dell Technologies. To qualify, a family’s income must be under $150,000, with residence in specific zip codes.

Companies like Micron provide contributions of $250 to children near their worksites. They also match employee donations up to $1,000 per child. Other companies like Mastercard, Uber, Visa, and some small businesses offer similar matches.

Retirement Planning Is Key

Financial experts highlight the importance of prioritizing parental retirement plans over children’s retirement savings. Carrie Joy Grimes, CEO of WorkMoney, emphasizes maxing out parental retirement accounts first. This approach avoids potential financial stress on children due to unmet retirement needs.

Benefits of 529 Plans

Parents can already invest in their children’s education through 529 savings plans. These plans provide tax-free withdrawals but restrict the use of funds to educational expenses. Trump Accounts, offering additional benefits, might suit families already comfortable with 529 plans.

For wealthier families who can afford both options, Trump Accounts provide an additional tax advantage. Families with lower incomes gain the most by having access to a digital donation facility, potentially helping children start adulthood with savings otherwise unavailable.

Ray Boshara, a senior policy advisor at the Aspen Institute, states these accounts could be transformative for these children, providing opportunities previously out of reach.