Trump Accounts

The One Big Beautiful Bill created a new retirement account for children under 18. While the $1,000 government seed funding grabbed headlines, the real opportunity is the ability to contribute up to $90,000+ over 18 years—without your child needing earned income—then convert it all to a Roth IRA.

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Table of Contents

Overview of Trump Accounts

The most important thing to understand is these accounts are a special type of RETIREMENT account for the benefit of your children.

While kids born between 2025 and 2028 will get a free $1,000 from the government, all children under the age of 18 are eligible to start one.

This means over 70 million Americans are eligible for these accounts!

However, since these are retirement accounts, there are a whole host of restrictions when it comes to being able to actually get money out of these accounts:

Your kids cannot get any money out until the age of 18 — for any reason.
After the age of 18 and before retirement age (59.5), they can only take money out penalty-free for a few handpicked reasons like qualified educational expenses and up to $10K for a down payment on their first house.

Otherwise, any dollars withdrawn before the age of 59.5 will also be subject to a 10% penalty on top of taxes.
They have to pay ordinary income taxes on the money when it is withdrawn.

With all these restrictions in place, when does contributing to a Trump account even make sense?

Contributing to a Trump Account

The most valuable feature of a Trump account is you can jumpstart a retirement account for your children without them needing earned income.

Prior to this account existing, if you wanted to open a custodial Roth IRA for your child, they would have to have earned income from a job to contribute.

No such requirement exists with Trump accounts!

This means you can contribute to these accounts much earlier, and for a longer time prior to them becoming adults.