A new feature of the One Big Beautiful Bill Act.
On July 4, 2025, President Donald J. Trump signed into law the One Big Beautiful Bill Act (OBBA), a comprehensive legislative package that includes updates to tax policy, national defense funding, and several new financial planning initiatives.
Among its many provisions is the creation of a new savings vehicle informally known as the “Trump Account for Children” —a tax-advantaged retirement account for minors, designed to give children a financial head start. Eligible children born between 2025 and 2028 will receive a $1,000 government-funded seed contribution, with additional contributions permitted from families and employers. These accounts share similar characteristics with a traditional IRA, including tax-deferred growth and penalties for withdrawals made before age 59½.
As financial professionals, we’re always evaluating new ways to help our clients build long-term wealth and secure their families’ futures. At first glance, the “Trump Account” might resemble just another policy experiment or political soundbite. But when examined more closely, it reveals itself as a potentially transformative planning tool—especially for families planning for the financial future of their children.
Below, we’ll unpack the mechanics of this account, highlight its unique features, and compare it to existing child-focused savings tools like 529 plans, and Uniform Transfers to Minors Act (UTMA) accounts, ABLE accounts, and Custodial Roth IRAs—so you can better understand its place in the evolving landscape of financial planning.
Before the beneficiary turns 18:
Once the beneficiary turns 18, the account transitions into a more flexible structure:
The “Trump Account” combines features from several existing account types:
In essence, it’s a hybrid account designed to maximize early retirement savings potential. For a closer look, refer to the comparison charts at the end of the article.
As part of a pilot initiative, children born in 2025, 2026, or 2027 are eligible for a $1,000 federal contribution to a “Trump Account.”
Assume a “Trump Account” is fully funded at $5,000 per year for the first 18 years of a child’s life. With an 8% annual return (net of inflation), the account would grow to approximately $187,000 by age 18.
If the beneficiary makes no further contributions and the account continues to grow at 7% annually:
This illustrates the power of early, consistent investing and compounding over time.
“Trump Accounts “may represent a significant evolution in how we approach retirement planning for future generations. With flexible funding options, tax-advantaged growth, and a strong foundation for compounding, they offer a compelling opportunity for families looking to secure long-term financial stability for their children.
As always, we recommend discussing these accounts in the context of your broader financial plan. If you have questions or would like to explore whether a “Trump Account” is right for your family, please don’t hesitate to reach out.
Sources:
https://www.savingforcollege.com/article/trump-account-vs-529
https://www.savingforcollege.com/article/what-is-an-ugma-or-utma-account
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