Families have a new account type to consider when thinking about long-term savings for children.
Created under federal tax legislation enacted in 2025, Trump Accounts are a new type of individual retirement account established for the benefit of eligible children. Contributions to these accounts began in July 2026. During a child's "growth period," special rules apply to contributions, investments, and withdrawals. After that period ends, traditional IRA rules generally apply.
As with any new account structure, understanding the rules is important before deciding how—or whether—it fits alongside a family's existing savings plans.
Who Is Eligible?
An initial Trump Account generally may be established for a child who has not reached age 18 by the end of the year the election is made, has a valid Social Security number, and does not already have an election on file. An authorized individual can make the election on the child's behalf.
There is also a separate federal pilot program. Children who are U.S. citizens, have a valid Social Security number, and were born from January 1, 2025 through December 31, 2028 may be eligible for a one-time $1,000 Treasury contribution. That pilot contribution does not count toward the account's regular annual contribution limit.
This distinction is worth noting: eligibility to establish an account and eligibility for the $1,000 pilot contribution are not identical.
How Contributions Work
During the growth period, contributions can generally be made even if the child does not have earned income.
For 2026, the general annual limit for contributions subject to the limit is $5,000. Certain employer contributions can be made up to $2,500, and those contributions count toward the $5,000 total. The limits are scheduled to become subject to inflation adjustments after 2027. Certain government, nonprofit, rollover, and federal pilot contributions are treated differently and may not count toward the general annual limit.
That means families may need to coordinate contributions from parents, grandparents, employers, and other sources to understand how the limits apply to their particular situation.
Investment Choices Are Restricted During the Growth Period
Trump Accounts do not provide an unrestricted investment menu while the beneficiary is a child.
During the growth period, investments generally must track a broad equity index made up primarily of U.S. companies, cannot use leverage, and must meet limits on annual fees and expenses.
These restrictions are designed into the account structure, but they also mean the account may have different diversification characteristics than other savings arrangements. Families may want to consider those differences as part of their overall financial picture rather than viewing any single account in isolation.
Access to the Money Is Limited While the Child Is Young
One of the most important features to understand is that funds generally cannot be distributed to the beneficiary during the growth period.
The IRS defines that period as beginning when the initial account is established and ending on December 31 of the calendar year in which the beneficiary turns 17. Limited exceptions include certain rollovers, correction of excess contributions, transfers to an eligible ABLE account in specified circumstances, and distributions following the beneficiary's death.
After the growth period, most of the special Trump Account rules cease to apply and the account generally becomes subject to the rules governing traditional IRAs.
How Does This Fit With Other Savings Goals?
A Trump Account does not necessarily replace other ways families may already be saving for a child's future.
Different account structures have different purposes, tax rules, contribution limits, investment choices, and restrictions on withdrawals. A family primarily focused on education expenses, for example, may have different considerations than one looking at savings over a much longer time horizon.
The important question is not simply whether an account is available, but how its characteristics relate to the family's goals, time horizon, existing savings, tax circumstances, and comfort with investment risk.
How to Establish an Account
The IRS now allows authorized individuals to submit Form 4547, Trump Account Election(s), electronically through an IRS Individual Online Account. The IRS says the process generally requires the child's Social Security number, date of birth, and address.
Parents or guardians considering an account may want to review the current IRS guidance before acting because regulations and administrative guidance surrounding this relatively new account type have continued to develop.
Keep the Bigger Picture in Mind
Trump Accounts add another option to the range of financial decisions families may consider for children. But contribution rules, tax treatment, investment restrictions, and access to the money can differ from other accounts.
Every family’s financial picture is different. If you’d like to better understand how Trump Accounts may fit alongside your other savings and planning goals, the team at Wilcox Financial Group is here to help you explore your options.
Sources
- Internal Revenue Service, “Trump Accounts” — eligibility, the $1,000 pilot contribution, and account-election information.
- IRS, Instructions for Form 4547, Trump Account Election(s) — account eligibility and election requirements.
- IRS/Treasury Guidance on Trump Accounts — contribution timing, account structure, investments, distributions, and other rules.
For educational purposes only. This material is not intended as investment, tax, or legal advice and should not be construed as a recommendation. Eligibility requirements, contribution limits, tax treatment, and other rules governing Trump Accounts may change. Investments are subject to market risk, including possible loss of principal. Consult appropriate professionals regarding your individual circumstances. Neither MML Investors Services, LLC nor any of its subsidiaries, employees or representatives are authorized to give legal or tax advice. Consult your own personal attorney legal or tax counsel for advice on specific legal and tax matters. Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC, member SIPC (www.sipc.org). Supervisory address: 300 Corporate PKWY, STE 216 N, Amherst, NY 14226. 716-276-1138. Wilcox Financial Group is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies CRN202909-12100785