By Chuck Bentley, CP Guest Contributor Friday, February 06, 2026
Dear Chuck,
The new Trump Account sounds very interesting. Should I contribute to it for my children? Anything that worries you?
Young Mom of Two
U.S. President Donald Trump arrives on stage before delivering remarks during the Treasury Department’s Trump Accounts Summit at Andrew W. Mellon Auditorium on Jan. 28, 2026, in Washington, D.C. “Trump Accounts” are a portion of recently passed tax and spending legislation where the federal government will deposit $1,000 into investment accounts for every child born between 2025 and 2028 once parents sign their children up while filing their income taxes. | Win McNamee/Getty Images
Dear Young Mom of Two,
First, let’s define what you mean by “Trump Account” to be sure we are on the same page. I like to think of it as a “Children’s Jumpstart Account.”
A Trump Account is a new type of long-term investment account created under the One Big Beautiful Bill Act (OBBBA) to encourage early saving for minors. Think of it as a starter IRA owned by a child with a parent or guardian acting on behalf of the beneficiary until they reach the age of 18.
It’s been described as a cross between a traditional IRA and a 529 savings account. Because of that, they will be difficult and expensive to liquidate before the age of 18 in order to protect the money for the child’s future.
How it works
Seed money can be gained when opening a Trump Account. It is free money that costs you nothing to claim, except the time to complete the form. This government pilot program will provide $1,000 to eligible children born between Jan. 1, 2025, and Dec. 31, 2028, who have valid Social Security numbers and are U.S. citizens. The Treasury Department will create and administer the initial accounts, which are slated to be available July 5, 2026. Families can then roll over the account to a financial provider that has a Trump Account product.
Form 4547 must be filed through the IRS or go online at trumpaccounts.gov. When filing, elect the option to open the account. Then elect to request the $1,000 if eligible. Two children can be elected on one form. File additional forms if needed. This can be filed with your 2025 tax return.
Individuals (parents and grandparents), employers, and charities may contribute up to $5,000 in total. The initial $1,000 seed money does not count toward the annual limit. If the limit is exceeded, the IRS may assess a penalty until the excess is corrected by withdrawing the over-the-limit contribution and any earnings.
Qualified general contributions (from charitable organizations) do not have an annual limit, which will benefit eligible families. Investments are limited to low-cost index mutual funds or ETFs with a 0.10% expense cap and no leverage. No withdrawals are allowed before age 18. After that, traditional IRA rules apply, with earnings being taxable when withdrawn.
It is highly important to keep accurate records of contribution sources for future distribution tax purposes and rollover reporting. Also, be aware of new details or changes that may occur prior to July 5, 2026.
Kiplinger reports that $1,000 allowed to compound at the S&P 500’s average 10% return would be worth over $490,000 by the time a child reaches retirement age. For children born before 2025, you may want to consider the options listed below.
Benefits of a Trump account
- Tax-deferred growth potential.
- No earned income requirement for contributions.
- $1,000 government seed contribution for eligible newborns.
- Low-cost index fund/ETF investment options.
- Flexible funding sources.
- No earned income requirement.
- No required minimum distributions (RMDs) at the age of retirement.
Things to consider
- Your personal financial circumstances.
- Investment is restricted to U.S stock index funds (low-risk, low-fee, broadly diversified).
- Less flexibility than other accounts.
- Annual contribution cap of $5,000/child.
- Taxed as income at the child’s tax rate at distribution (at a lower long-term capital gains rate).
- Contributions are not tax-deductible.
- Employer payroll feature depends on plan adoption; it is excluded from taxable income.
- No withdrawals before age 18 except in the following conditions:
-
- Changing financial institution or switching trustees; moving to another Trump Account.
- Rollover to an ABLE account for those with a qualifying disability the year the child turns 17.
- Correction of excess contributions.
Options
- A529 Plan may be better for college savings (see link below).
- If a child has earned income, a Roth IRA has higher contribution limits, and withdrawals in retirement are tax-free.
No worries, just some considerations
A slight caveat to be aware of, according to Amanda Macias at FoxBusiness:
“The IRS has issued only preliminary guidance and is now seeking public feedback, a formal process that allows parents, financial experts, companies and advocacy groups to comment before the regulations are finalized. The comment period remains open through February 20, 2026, meaning many details of the program are still subject to change.”
If this is approved, I see no reason not to take advantage of the offer for free money. My advice is to open a Trump Account for each of your qualifying children. It is important to max out your own retirement accounts, particularly if an employee match is available, before you begin socking extra money away in the children’s Trump Accounts. Remember, not every child will go to college, so consider the most flexible options and benefits of a variety of accounts. I have links to additional resources below.
Consider using the same level of restraint as in the Trump Account for your personal financial management. Treat all funds as dedicated to your future, and be disciplined in how you give, save, and invest regularly.
As in all things, God is pleased with good stewardship. Keep good records, give faithfully every month, and save and invest a portion of all your income with consistent discipline. Just as a Trump Account, compounded over many years, can yield significant returns, this approach will pay great dividends over time.
Extra information
I’d like to invite you and your family to join a free Crown Bible study on the YouVersion app. Saturate your mind daily with instruction and encouragement from God’s Word.
Chuck Bentley is CEO of Crown Financial Ministries, a global Christian ministry, founded by the late Larry Burkett. He is the host of a daily radio broadcast, My MoneyLife, featured on more than 1,000 Christian Music and Talk stations in the U.S., and author of his most recent book, Economic Evidence for God?. Be sure to follow Crown on Facebook.
