01/20/2026
Trump accounts" are a proposed savings and investment program for children, established under the One Big Beautiful Bill Act. For children born between 2025 and 2029, the government will provide a $1,000 seed deposit, and parents can contribute up to $5,000 per year. The funds are restricted to specific low-cost S&P 500-tracking mutual funds or ETFs and are intended to grow until the child turns 18. Key features of Trump Accounts Government contribution: A one-time $1,000 government deposit is provided for each eligible child born between December 31, 2024, and January 1, 2029.
Parent/family contributions: Parents, guardians, and other family members can contribute up to $5,000 per year.
Employer contributions: Employers can contribute up to $2,500 per year, and this amount does not count toward the employee's taxable income.
Investment restrictions: Funds must be invested in mutual funds or ETFs that track the S&P 500 or another index of U.S. companies, with a low expense ratio of no more than 1%
Contribution limits: The total annual contribution limit is $5,000, with the government deposit not counting toward this limit.
Withdrawal rules: Before age 18, the funds cannot be withdrawn. At age 18, the account is transferred to the child and can be withdrawn, but earnings are taxed as ordinary income. Withdrawals before age 59½ may be subject to a 10% penalty, similar to a traditional IRA, with exceptions for certain qualified expenses like college tuition.
Taxation: Contributions are not tax-deductible, but investment earnings are tax-deferred. When withdrawn, the earnings are taxed as ordinary income.
Implementation: The program is expected to be managed by the U.S. Department of the Treasury, with an expected launch by January 1, 2026.
