Today, President Trump announced the program “Trump Accounts. Parents and others can contribute to these accounts for American children.
Trump Accounts Overview
- The Big Beautiful Bill allows Trump Accounts for children born between January 1, 2025, and December 31, 2028, with an initial government deposit of $1,000
- Parents can contribute up to $5,000 annually, with a portion of employer contributions (up to $2,500) not affecting taxable income.
- Contributions must be invested in stock mutual funds or ETFs that track the S&P 500, with withdrawals permitted after age 18, like traditional IRAs.
Projected Account Balances
- For a child born in 2026, maximum contributions could yield $303,800 by age 18 and $1,091,900 by age 28 under medium return scenarios.
- If contributions are halved, balances would be $154,800 at 18 and $555,000 at 28. Without additional contributions, balances would be $5,800 at 18 and $18,100 at 28.
- Even under low return scenarios, balances remain substantial, indicating the potential long-term benefits of early investment.
Eligibility and Contribution Details
- Children born before January 1, 2025, can also open Trump Accounts but will not receive the initial government deposit.
- Contribution limits will be adjusted for inflation after 2027, enhancing the accounts' growth
- potential.
Parents should compare Trump Accounts to the 529 Accounts that have been available if they are making gifts to children.
Call the attorneys at Altman & Associates at 301-468-3220 or visit altmanassociates.net.
