The New Trump Accounts: What You Need to Know

Patrick Horning is an attorney in Sophisticated Planning Strategies at Northwestern Mutual.

On July 4, 2026, the anticipated Trump Accounts are scheduled to become available. Also referred to as 530A accounts, Trump Accounts offer families a new way to start long-term savings early. Whether you're a parent looking to get your child established or a grandparent wanting to leave a meaningful legacy, these accounts offer a unique opportunity to put the power of compound growth to work early.

This program is brand new, and the Treasury Department is still releasing guidance on exactly how these accounts will operate. We understand that navigating a new saving option like this can feel overwhelming. So, if you're wondering where to begin, we’ve got you. Here is what you need to know right now, and how you can start taking advantage of these accounts for your family.

What is a Trump Account?

A Trump Account is a tax-advantaged savings account for children created by the One Big Beautiful Bill Act. These accounts allow parents, grandparents, and employers to contribute up to a combined $5,000 annually per child. Eligible children born between 2025 and 2028 can receive an automatic $1,000 federal government seed contribution. The account grows tax-deferred and essentially converts to a traditional IRA on January 1 of the year the child turns 18.

Trump Account vs. traditional IRA: What is the difference?

If you’re familiar with how a traditional (non-Roth) Individual Retirement Account (IRA) works, you’ll find that Trump Accounts have many similar characteristics. Here are the key differences at a glance.

How to open a Trump Account

A Trump Account must first be established through the Treasury Department before it can be rolled over to an approved IRA administrator. You can do this online at trumpaccounts.gov or by filing IRS Form 4547 with your taxes. Once the account is created by the Treasury Department, it can then be rolled over to an approved IRA administrator.

A word of caution on who opens the account: Only one Trump Account can be established per eligible child, so it is important for families to communicate before opening these accounts. There is a strict priority order regarding who can open a Trump Account for a child. When you open the account, you must sign a legal statement proving you’re eligible. As an example, if a child’s parents have already opened an account, a grandparent attempting to open a Trump Account is now ineligible. The grandparent opening a second one could inadvertently commit perjury by signing the federal form saying the grandparent is eligible to open the account. Always coordinate with your family and your advisor first.

Who can contribute?

Family contributions

One of the key features of a Trump Account is that multiple people can contribute. The child, parents, grandparents, and others can all contribute up to a combined $5,000 each year. This limit will be indexed for inflation beginning in 2028. The contributions are not deductible.

The gift tax gray area: While we know family members can contribute to a Trump Account, it is not clear whether those contributions qualify for the gift tax annual exclusion or count against the lifetime exemption. While future guidance will hopefully clarify that these contributions do qualify for the annual exclusion—as the clear intent of the law is to encourage saving—you should consult with your Northwestern Mutual advisor and tax professional before making contributions.

Employer contributions may become available through workplace benefits

Employers can contribute up to $2,500 per employee, not per child, to a Trump Account. This contribution is not taxable to the employee. Additionally, some employers may eventually offer Trump Account contributions through cafeteria plans (workplace benefits programs that let employees pay for certain expenses through pre-tax payroll deductions).

Because the legislation is so new and most corporate benefit packages for 2026 were set well in advance, the earliest your workplace may offer these options may be during the 2027 benefits enrollment season.

Government and nonprofit contributions

Parents and grandparents will likely be the primary funders of these accounts, but the One Big Beautiful Bill Act of 2025 allows government entities and certain nonprofit organizations to make a nontaxable contribution to a child’s Trump Account.

• The federal seed contribution: As noted above, the federal government is kick-starting this initiative by providing an automatic $1,000 seed contribution for eligible children born between 2025 and 2028.
• State, local, and nonprofit support: Beyond the federal level, the law explicitly permits state and local government entities, as well as certain nonprofit organizations, to make contributions to a child’s Trump Account.

We are still waiting for details about how community foundations, charities, and state programs will be able to utilize this feature. Some public charities and private foundations have already announced they will make contributions to children who meet certain criteria. The number of charities and foundations doing this is expected to grow.

Keep in mind that any contributions from these outside entities do not count toward the $5,000 annual combined contribution limit.

When can the funds be accessed?

Funds in a Trump Account generally cannot be accessed until January 1 of the year your child turns 18. Once that date arrives, the account basically transitions into a traditional IRA, meaning standard IRA withdrawal rules will take effect.

Because it effectively becomes a traditional IRA, any funds your child withdraws before reaching age 59½ will generally be subject to ordinary income taxes plus a 10 percent early withdrawal penalty. However, there are a few key exceptions where this 10 percent penalty will be waived, allowing your child to use the funds for major life milestones. These penalty-free exceptions include:

• Higher education: Paying for qualified college or university expenses.
• Buying a first home: Putting up to $10,000 toward the purchase of their first house.
• Growing their own family: Covering up to $5,000 in qualified expenses for the birth or adoption of a child.

While the penalty will be waived in these scenarios, income taxes may still apply. You can view the complete list of early distribution exceptions directly on the IRS website.

Let’s prepare together

You’ve worked hard to save and invest, and now you have a powerful new tool to help pass that financial security on to the next generation. But if you're feeling overwhelmed by the evolving rules or unsure of how a Trump Account fits into your broader financial picture, you don't have to figure it out alone. We’ve got you.

Your Northwestern Mutual advisor is here to look at the big picture, ask the right questions, and help you uncover opportunities you might have missed. Whether you are balancing your own retirement needs or exploring flexible ways to save for your kids’ future, we can help you design a comprehensive, tailored plan that adapts as your family grows. Let’s start a conversation today about protecting and growing your wealth for generations to come.

Frequently asked questions

Who is eligible for the $1,000 government head start?
Children born between 2025 and 2028 who are U.S. citizens with a valid Social Security number are eligible for the $1,000 government seed contribution. This is an automatic seed contribution, not a match, meaning no initial deposits are required from your family to receive these funds.

Does my child need to have a job to qualify for a Trump Account?
No. A child does not need earned income to have or receive contributions to a Trump Account.

When can the funds be withdrawn?
Funds in a Trump Account generally cannot be withdrawn before January 1 of the year the child turns 18. At that time, the Trump Account essentially converts into a traditional IRA, and standard IRA withdrawal rules will generally apply.

Can a child have more than one Trump Account?
No. Only one Trump Account can be established per eligible child. This is why it is critical for parents and grandparents to communicate to ensure multiple family members do not attempt to open an account for the same child.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^®, CERTIFIED FINANCIAL PLANNER™ and CFP^® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.