The recent passage of the One Big Beautiful Bill Act (OBBA) introduced a new way for families to begin saving and investing in their children early in life. These new savings vehicles—officially known as 530A accounts or referred to as “Trump Accounts”—are designed to help families start building long-term financial foundations for children from birth.
By encouraging early investing and long-term growth, these accounts offer families an additional planning tool to support a child’s future as they transition into adulthood.
How Does a “Trump” Account Work?
Opening a 530A account is a relatively straightforward process. To be eligible, the child must:
- Have a Social Security number
- Be a U.S. citizen
- Be under the age of 18 when the account is established
To formally open the account, a parent or legal guardian files Form 4547 with their tax return. The parent or guardian serves as the custodian of the account until the child reaches age 18, at which point control of the account transfers to the child.
Funds contributed to a Trump account are invested in U.S.-based companies, and custodians are able to monitor the account’s progress over time.
Additionally, for children born between January 1, 2025 and December 31, 2028, eligible accounts receive a $1,000 initial government contribution, providing an immediate base for long-term growth.
Contributing to a Trump Account
While contributions are not required, anyone may contribute to a child’s Trump account, subject to an annual contribution limit of $5,000 per account. Contributions may be made by:
- Parents
- Grandparents
- Other family members
- Employers
Individual contributions are made on an after-tax basis, while employer contributions are made on a pre-tax basis.
Withdrawals are generally restricted before the child reaches age 18. Once the child takes ownership of the account, it begins to function similarly to an IRA:
- Pre-tax contributions are taxed at the child’s income tax rate upon withdrawal
- After-tax contributions are only taxed on the earnings portion
One notable distinction is that if the account remains separate from the child’s other retirement accounts, it is not aggregated with traditional IRAs when calculating taxes or penalties on withdrawals.
Like IRAs, investment earnings grow tax-deferred and are taxed only when funds are withdrawn.
Planning Opportunities
530A accounts provide families with another long-term planning option for children, particularly for those who value early investing and disciplined savings. The temporary government contribution available for children born between 2025 and 2028 creates an added incentive to establish an account early and allow time and compounding to work.
As with any planning tool, these accounts are most effective when integrated into a broader family financial plan. Understanding how Trump accounts fit alongside education savings, retirement planning, and legacy goals is key.
If you would like to learn more about whether a Trump account makes sense for your family, or how it may fit into your broader planning strategy, our team would be happy to help you begin building a strong foundation for your family’s future.
Bibliography:
Dickson, J. (2026, January 5). What to know about the new trump accounts for kids. Vanguard. https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/what-to-know-about-new-trump-accounts-for-kids.html
The White House. (2026). Trump accounts - jumpstarting the American dream. https://trumpaccounts.gov/
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