Account Purpose and Ownership
Feature |
Trump Account |
UTMA(Custodial Account) |
529 Plan |
ABLE Account |
Custodial Roth IRA |
Purpose |
Retirement savings for minors | General savings / investments for minors | Education savings (some retirement flexibility) |
Savings for individuals with disabilities | Retirement savings (can be used for qualified purposes before retirement). |
Who Can Contribute |
Anyone (parents, employers, governments, charities). |
Anyone | Anyone | Anyone | Anyone (but must be from minor’s earned income). |
Control of Funds |
Parent / custodian controls pre-18. | Custodian until age of majority (18 or 21). | Account owner retains control. | Beneficiary controls(or authorized individual). |
Custodian controls until age of majority; then minor gains control. |
Contribution and Income Rules
Feature |
Trump Account |
UTMA(Custodial Account) |
529 Plan |
ABLE Account |
Custodial Roth IRA |
Contribution Limit |
$5,000/year (indexed); $2,500 from employer; unlimited from gov/charity. | No formal limit (subject to gift tax rules). |
Varies by state (often $350K–$500K+ lifetime). | $20,000/year (2026); additional
if working (ABLE to Work Act). |
$7,500/year (2026); limited to minor’s earned income. |
Earned Income Required? |
No | No | No | No | Yes – contributions limited to earned income. |
Tax Treatment and Investments
Feature |
Trump Account |
UTMA(Custodial Account) |
529 Plan |
ABLE Account |
Custodial Roth IRA |
Tax Treatment of Contributions |
Contributions made by families are not tax‑deductible, and government pilot deposits are tax‑free but not deductible. Employer contributions may be excluded from the employee’s income under IRC §128. | After-tax | After-tax
(some states offer deductions) |
After-tax
(some states offer deductions) |
After-tax
(not deductible) |
Tax Treatment of Growth |
Tax-deferred (pre-18); potentially IRA rules after 18 and varying based on contribution type. | Taxable annually (subject to
kiddie tax). |
Tax-free if used for qualified education expenses. | Tax-free if used for qualified disability expenses. | Tax-free, subject to 5-year rule and penalties for early withdrawal before age 59.5. |
Investment Restrictions |
Limited to low-cost U.S. equity index funds pre-18. | No restrictions | Limited to plan-selected investment options. | Limited to plan-selected investment options. | Broad range of investments (stocks, bonds, mutual funds, etc.) |
Access and Usage
Feature |
Trump Account |
UTMA(Custodial Account) |
529 Plan |
ABLE Account |
Custodial Roth IRA |
When Can Funds Be Accessed? |
At age 18, but penalties/taxes apply for non-qualified withdrawals. Before age 18, funds can be rolled into another Trump account. If the individual is disabled, a full rollover into an ABLE account is permitted at age 17, subject to eligibility rules. | Can be used anytime and for any purpose. | Can be used anytime, but penalties/taxes apply for non-qualified withdrawals. | Can be used anytime, but penalties/taxes apply for non-qualified withdrawals. | Direct contributions can be withdrawn at any time without taxes or penalties. Earnings are subject to the Roth 5‑year rule and may be taxed and penalized if withdrawn before age 59½ unless an exception applies. |
Usage Restrictions |
Must stay in account until 18; intended for retirement but can be used without penalty for qualifying withdrawals before 59.5. | Can be used for anything once child reaches majority. | Must be used for qualified education expenses to retain tax advantages. | Must be used for qualified disability expenses to retain tax advantages. | None |
Rollover Flexibility |
Limited – can’t roll into standard IRA before 18; Roth conversion possible post-18. | No rollover options | Can rollover up to $35,000 to Roth IRA (subject to conditions). | Can rollover from 529 to ABLE (up to annual limit); Trump account maybe rolled over to ABLE in its entirety the year the minor turns 17 (does not count toward annual limit). | N/A |
Impact on Benefits and Government Support
Feature |
Trump Account |
UTMA(Custodial Account) |
529 Plan |
ABLE Account |
Custodial Roth IRA |
Impact on Financial Aid (FAFSA) |
Expected to follow standard IRA FAFSA rules: not counted as an asset, but withdrawals count as income. Formal guidance specific to Trump Accounts is still pending. | Student asset (heavily impacts aid) | Parent asset
(less impact on aid) |
FAFSA does not consider this an asset of the child or parent. | Student asset (but retirement assets are often excluded from FAFSA calculations). |
Impact on disability benefits |
Pending guidance from SSA if balance is not rolled to ABLE at age 17. | Counted as resource after age of majority. | Excluded as resource – owned by third party. | Up to $100,000 is excluded as a resource. | Counted as resource after age of majority. |
Government Contribution Pilot |
$1,000 for kids born 2025–2028 | None | None | None | None |