The One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4, 2025, establishes the pilot program for the “Trump account,” an investment account for U.S. citizens under age 18 with a social security number. Parents, as well as other tax-paying entities, may contribute to a Trump account on behalf of their child every year until the child turns 18. The Trump account will operate much like an IRA once the child turns 18.
Contributions to a Trump account (which are non-deductible, so made from after-tax funds) are capped at $5,000 a year, and this figure will be indexed to inflation starting in 2027. Children who were born between January 1, 2025, and December 31, 2028, will receive an initial $1,000 federal deposit. Individuals who do not qualify for the initial $1,000 deposit may still open a Trump account if they are eligible. Eligible individuals may open a Trump account beginning January 1, 2026. The OBBBA requires Trump accounts to be invested in “eligible investments” including mutual funds or exchange-traded funds that track a qualified index.
The Trump account is like a traditional IRA with several key differences
The OBBBA provides that Trump accounts are to be treated in the same manner as a traditional IRA. As noted below, however, there are notable differences that distinguish these accounts.
The Audience
Trump accounts are intended to allow individuals under the age of 18 to begin saving for future expenses. Unlike a traditional IRA, the Trump...
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