What are Trump Accounts? A Simple Guide for Families
- 6 days ago
- 6 min read
A brand-new way to save for your kids/grandkids launches July 4th, and most people don't know it exists yet.
The new "Trump account" lets families save for children under 18, with potential free seed money and more flexible uses than a 529. The Waymark Wealth team breaks down who qualifies and how to get started.
Watch the latest Coffee with Waymark to get ahead of this new savings opportunity.
A brand-new savings vehicle is launching on July 4th, 2026, and if you have children or grandchildren under the age of 18, this is worth paying attention to. It's called a Trump account, officially designated the 530A account, and it could become one of the most powerful tools available for building generational wealth, starting from day one of a child's life.
Here's a straightforward breakdown of what it is, how it works, and what you can do right now.
What Exactly Is a Trump Account?
Think of it as an IRA, but for kids who don't have a paycheck.
One of the biggest barriers to early investing has always been the earned income requirement. To contribute to a traditional IRA, you need to have earned income. Most children don't. The Trump account was designed specifically to close that gap, giving families a tax-advantaged vehicle to invest on behalf of minors from birth all the way through age 17.
Established by the One Big Beautiful Bill on July 4th, 2025, the account allows contributions of up to $5,000 per year in after-tax dollars, which then grow tax-deferred — meaning no taxes on the growth until funds are withdrawn.
How Is This Different from a 529?
Great question, and an important one.
A 529 account is an education savings account. Money goes in after-tax, grows tax-free, and comes out tax-free, but only when used for qualified education expenses. That's a great deal, as long as your child actually uses it for school.
The Trump account is broader. Yes, it can be used for education. But it can also be used for:
Starting a business
Unreimbursed medical expenses
A down payment on a home
That flexibility is a big deal. One of the most common concerns parents have when opening a 529 is: What if my kid doesn't go to college? What if they get a full scholarship? The Trump account addresses that anxiety head-on. The two accounts aren't mutually exclusive either, having both a 529 and a 530A could be a smart strategy depending on your family's goals.
Who Qualifies?
This is where a lot of confusion has come up, so let's clear it up.
Any child who meets all three of the following criteria can open a Trump account:
Under the age of 18
Has a valid Social Security number
Is a U.S. citizen
That's it. There's no restriction on birth year. A 14-year-old is just as eligible as a newborn.
The confusion stems from a government incentive for children born between January 1st, 2025 and December 31st, 2028. For those children, the federal government will seed the account with $1,000 to get things started. In addition to that government contribution, the child's family can still contribute up to $5,000, meaning in year one, those accounts could hold $6,000 before any investment growth.
Free Money: The Dell and Dalio Factor
It gets more interesting. Two major private donors have stepped in to sweeten the deal for qualifying families.
Michael Dell's family foundation is offering additional contributions for children age 10 and under in zip codes where the median household income is under $150,000. Ray Dalio's contribution targets Connecticut residents in similar income brackets.
So depending on where you live and your household income, there could be meaningful free money available from three sources: the federal government, Michael Dell, and Ray Dalio. If you're in Connecticut, it's worth looking into all three.
How the Money Gets Invested
Once the account is open, funds can be invested in exchange-traded funds (ETFs); broadly diversified, low-cost investment vehicles. The government has set a cap on fees: no ETF in a Trump account can charge more than 0.1% in annual expenses.
To put that in context, investment fund fees can range anywhere from nearly zero to upwards of 5% annually. Most fall between 0 and 1%. A 0.1% cap is solidly in low-cost territory, which is a meaningful protection for long-term investors, especially when compounding over 10, 15, or 18 years.
What About Payroll Contributions?
Here's a detail that hasn't gotten much attention yet but could be significant.
Similar to how flexible spending accounts (FSAs) work, some employers may allow employees to make systematic payroll deductions of up to $2,500 into a Trump account, and that portion of the contribution could be pre-tax.
To be clear: if you simply open the account and fund it yourself, you don't get a tax deduction. But if your employer participates and offers payroll deduction, up to $2,500 of your contribution could be treated as pre-tax income, a meaningful benefit.
This is still being worked out on the employer side, so check with your HR department to see if it's on the roadmap.
How to Get Started
The account can be opened today at trumpaccounts.gov. You can either download the app and submit it to the U.S. Treasury, or complete Form 4547 online (an IRS.gov account is required).
Contributions can't be made until July 4th, 2026, but getting the account set up in advance means you'll be ready to move on launch day.
For Waymark Wealth clients: LPL Financial is currently reviewing the program. Once that due diligence is complete, the team will be able to open and manage these accounts directly, the same way they handle IRAs, Roth IRAs, and SEP IRAs. Stay tuned for an update.
The Bottom Line
Anything that helps families save earlier and with more flexibility is a step in the right direction. Whether you have a newborn or a teenager, a Trump account is worth exploring, especially if there's government or private seed money on the table.
Questions? Reach out to the Waymark Wealth team. This is a fast-moving topic and the details are still evolving, but the team is here to help you navigate it.
Brendan is the Managing Director for Waymark Wealth Management. He has extensive experience in comprehensive wealth management. His focus includes retirement planning, behavioral finance, investment portfolio construction, education funding, insurance & risk management, taxes, charitable giving, and estate planning. Brendan has an ability to take clients' complex visions and distill them down to simple action plans, helping them move from where they are today to where they want to be tomorrow.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents in specific states which are listed on our website at www.waymarkwealth.com
The opinions voiced in this video are for general information only and are not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Trump Accounts offer tax deferred growth on earnings. Family contributions are made with after tax dollars, and eligible employer contributions may be excluded from the employee’s taxable income. A one time $1,000 federal contribution may be available for eligible children born between 2025 and 2028. Distributions are generally prohibited during the child's growth period and, once permitted, are taxable as ordinary income and may be subject to a 10% IRS early distribution penalty if taken before age 59½. Contribution limits and other restrictions apply, and some rules remain subject to future Treasury and IRS guidance. Consult a qualified tax advisor or financial professional before making decisions.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF's net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
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