10/14/2026
Whether it makes good financial sense to open a Trump Account for your children is something each parent needs to decide.
Only children who are born between 2025 and 2028 are eligible for the free $1,000 government contribution ("seed money").
At the same time, the drawbacks to Trump accounts may be something Congress could change to improve them and make them more favorable to working families.
"The biggest surprise is that Trump Accounts are often not tax advantaged for normal family contributions.
Parents, relatives, and friends can contribute up to $5,000 per child each year, but these contributions are not deductible. The money must be invested in low-cost US index funds and is locked up until the child turns 18. At that point, the account converts to a traditional IRA. Withdrawals are generally taxed at ordinary income tax rates, and withdrawals before retirement that do not qualify for a short list of exceptions face an additional 10 percent penalty.
That structure creates a problem. Family contributions go in after tax, just like money put into a regular brokerage account. But unlike a brokerage account, the investment gains are later taxed as ordinary income instead of at the lower capital gains rate. For many families, that means putting their own money into a Trump Account could leave their child worse off than using a normal taxable brokerage account, let alone a 529 plan."
(More links in the first comment)
https://www.cato.org/blog/trump-accounts-good-idea-bad-design
