A new savings and investment option is now available for families looking to invest in a child’s future. 

Known as “Trump Accounts” (officially IRS Section 530A Accounts), these new tax-advantaged accounts are designed to encourage long-term investing from an early age by combining a government-funded contribution for eligible newborns with additional savings from parents, grandparents, employers, and other family members. 

What Are Trump Accounts? 

A Trump Account is an investment account established for children under age 18. The account is owned by the child and managed by a parent or guardian while the child is a minor. 

The account is invested in broadly diversified, low-cost U.S. stock index funds. The objective is simple: begin investing as early as possible and allow decades of compounding to work. 

Who Is Eligible? 

Any child under age 18 with a Social Security number may have a Trump Account. In addition, children born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 contribution from the federal government. 

Parents, grandparents, relatives, friends, and even certain employers may also contribute, subject to annual contribution limits. 

How Do They Work? 

Families can contribute up to $5,000 per child each year (subject to future inflation adjustments). The investments grow tax-deferred, and the account is designed to remain invested throughout childhood. Under current law, the account transitions into a traditional IRA framework when the child reaches adulthood, with withdrawals generally following IRA tax rules. 

Why Might Families Consider One? 

One of the greatest advantages in investing is time. Even modest contributions made early in life can benefit from decades of compound growth. Starting at birth provides one of the longest investment horizons possible. 

For families already saving in a 529 plan or simply looking for another way to build wealth across generations, a Trump Account may provide an additional planning opportunity. 

When Does It Make Sense? 

A Trump Account may be worth considering if your goal is to: 

• Start investing for a newborn or young child 

• Take advantage of the government’s initial contribution (if eligible) 

• Encourage long-term investing habits 

• Supplement—not replace—other savings strategies 

However, these accounts are not intended to replace every savings vehicle. Families focused primarily on college funding may still find a 529 plan to be the more tax-efficient choice for education expenses. Likewise, custodial brokerage accounts may offer greater flexibility for goals that require access before adulthood. 

Ready to Get Started? 

You can elect to open a Trump Account for your eligible child (or grandchild) using IRS Form 4547. You can fill out and submit the form right in the Trump Accounts app (available here: https://trumpaccounts.gov/), when you file your taxes, or through the secure IRS website called Individual Online Accounts, or IOLA. 

Our Perspective 

We rarely find that one account is the “best” answer for every family. Instead, successful planning typically involves selecting the right combination of tools based on your goals, tax situation, and time horizon. 

For some families, a Trump Account could become another valuable piece of a long-term wealth-building strategy. For others, existing options such as 529 plans, Roth IRAs, or traditional investment accounts may continue to provide the greatest benefit. 

Bottom Line 

From a fiduciary perspective, the $1,000 government contribution available to eligible children born between 2025 and 2028 is likely the most compelling feature of these accounts, while the long-term investment horizon reinforces sound wealth-building principles. 

As with any financial planning decision, the most effective strategy is the one that fits your family’s unique objectives. 

Advisory services are offered through Collective Wealth Advisors LLC, a Registered Investment Adviser with the SEC. For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have ap- proved, determined the accuracy, or confirmed the adequacy of this article.