A Pathway to Financial Freedom for the Next Generation
This is the smile you could receive from your child or grandchild when you put them on the path to financial freedom. At Astoria Strategic Wealth, we’re passionate about empowering families with clarity on emerging financial tools that could shape long-term outcomes. One of the most talked-about developments of 2026 is the launch of Trump Accounts – a new, federal savings initiative designed to give every eligible child a meaningful start at building a strong financial future.
What Are Trump Accounts?
Trump Accounts are tax-advantaged investment accounts authorized under Section 530A of the Internal Revenue Code (IRS) for children under age 18. These accounts are meant to encourage early participation in the financial markets and long-term wealth building.
Who Is Eligible?
- Must be a U.S. citizen child under age 18 with a Social Security number.
- Children born between January 1, 2025, and December 31, 2028 receive a $1,000 federal seed contribution.
- Children under 18 but born outside this window can still open accounts (without the $1,000 seed).
How Trump Accounts Work
- Automatic seed: $1,000 from the U.S. Treasury invested on behalf of eligible newborns (children born 2025-2028). You may still open and fund an account for a child under 18 not born within this timeframe, but you will not receive the initial $1,000.
- Annual contributions: Up to $5,000 total per year from parents, guardians, friends, or employers (employer contributions capped at $2,500 and count toward that $5,000 limit).
- Investment strategy: Funds are invested in diversified U.S. stock index funds.
- Growth period: Trump Accounts are designed to function similarly to Traditional IRAs. Contributions are made on an after-tax basis and grow tax-deferred over time. Withdrawals are generally taxed as ordinary income. Funds are expected to become accessible beginning at age 18, at which point the account may convert to a Traditional IRA. Withdrawals taken before age 59½ may be subject to early-withdrawal penalties unless an existing IRS exception applies (such as certain education expenses or a first-time home purchase), in which case penalties may be avoided but income taxes would still apply. Final rules around access and qualified uses will depend on IRS guidance.
How to Sign Up
- Parents or legal guardians can open an account by submitting IRS Form 4547 or via the online portal at trumpaccounts.gov (portal expected by summer 2026).
- Filing during your 2025 tax return helps ensure the account is ready when contributions begin mid-2026.
Projected Growth: A Compelling Comparison
Using an assumed average annual 7% rate of return over 18 years, you might expect the following growth:
* Past performance is not indicative of future performance. The figures above are hypothetical in nature. Actual results could be meaningfully different. Returns reflected are before taxes, expenses, and are for illustrative purposes only and do not represent a real portfolio.
Final Perspective
Trump Accounts represent a unique opportunity to introduce investing earlier in life, and they highlight the power of compound growth when time and consistent contributions work together. As with any financial vehicle, it’s important to assess how this tool aligns with your family’s broader wealth plan.
There are many ways to save for your child(ren)’s financial needs. At Astoria Strategic Wealth, we’re here to help you navigate these options thoughtfully and make choices aligned with your values and financial goals.
We think of Trump accounts as an additional way to put aside money for a child – another way to think of it is as an “and” as opposed to an “or”.
Please feel free to share this with someone you know who might benefit from its financial impact.