Trump Accounts Explained: A New Way to Jumpstart Your Child’s Savings
There’s a new savings account available for children, and for families who qualify, it starts with a government-funded head start.
For children born between 2025 and 2028, these accounts—commonly referred to as Trump Accounts—include a one-time $1,000 contribution from the federal government. That initial funding can serve as the foundation for long-term growth.
Trump Accounts are designed for long-term investing. Contributions are invested in low-cost, broad-based index funds, and the account grows tax-deferred over time. Once the child reaches adulthood, the account transitions into a retirement-style account, with withdrawals subject to standard tax rules.
In addition to the initial contribution, families can contribute up to $5,000 per year, with potential employer contributions as well. Over time, that combination of early funding and compounding can create a meaningful financial asset.
In this video, we cover:
- Who qualifies for the $1,000 government contribution
- How Trump Accounts work and how they’re invested
- Contribution limits and rules
- When funds can be accessed
- How these accounts compare to 529 plans and custodial accounts
This may not be the right solution for every goal, but if your child qualifies, it’s an opportunity worth understanding.
If you’d like help determining how this fits into your broader strategy, Hanover Advisors can help you evaluate your options and put a plan in place.