News & Insights
Trump Accounts: A New Way to Build Wealth for the Next Generation
How families can use this new savings opportunity to give children a powerful financial head start
One of the greatest gifts we can give our children is not just financial support, but financial opportunity.
The One Big Beautiful Bill Act (OBBBA) created a new tax-advantaged savings and investment account for children – called the Trump Account – that may provide families with a meaningful way to begin building wealth early in a child's life – allowing time, discipline, and long-term investing to do what they do best.
At LFS Wealth Advisors, we often say that successful wealth management is rarely about reacting to headlines. It is about understanding how new opportunities fit into a well-designed plan.
This may be one of those opportunities.
Why Starting Early Can Make All the Difference
When it comes to investing, time is one of the most valuable assets available.
The earlier money is invested, the longer it has to benefit from compound growth.
That means even modest annual contributions can grow into something substantial over time.
For parents and grandparents, this creates an opportunity to begin building meaningful assets for a child's future – whether that ultimately helps with education, a first home, future retirement savings, or simply giving them a stronger financial foundation.
Just as important, it opens the door to conversations about:
- saving with purpose
- investing for the long term
- patience and discipline
- how wealth is built over time
These lessons often become just as valuable as the dollars themselves.
Illustrative example assumes a 6% annual rate of return and is for informational purposes only. Actual investment results will vary and are not guaranteed.
How Trump Accounts Work
Trump Accounts are new tax-advantaged investment accounts created for children under age 18.
Beginning in 2026, eligible children can receive annual contributions up to $5,000 per year, with contributions allowed from a wide range of sources, including:
- parents
- grandparents
- family members
- friends
- employers
- charitable organizations
Unlike some other account types, the child does not need earned income in order to receive contributions.
Funds are generally invested in broad market mutual funds or ETFs tied to major indexes, allowing families to focus on long-term growth.
Generally, no withdrawals are allowed before age 18. Once the beneficiary turns 18, the Trump Account will need to be converted to an IRA – at which point IRA withdrawal rules will apply. It can also then be converted to a Roth at the beneficiary's ordinary income tax rate.
One of the best features of Trump Accounts is that the OBBBA promises newborns born between Jan. 1, 2025, and Dec. 31, 2028, a federal grant of $1,000. We expect more details on how this will work in the coming months.
Who is eligible for Trump Accounts?
Any child who hasn't reached the age of 18 during the calendar year and has a Social Security number can have a Trump Account. In other words, the beneficiary must be 17 or younger for the entire year to accept contributions to their account. As noted above, contributions cease in the year the eligible the beneficiary reaches 18. However, to receive the free $1,000 federal grant, the child will need to be a U.S. citizen.
How to Open an Account
Once fully launched, these accounts are expected to be established directly through the official Trump Accounts website: trumpaccounts.gov. Launch date expected July 4, 2026.
Parents or guardians will be able to:
- verify eligibility
- open the account
- designate the child as beneficiary
- select the investment option
As additional details are released, we expect the process to become even more straightforward.
At LFS, we'll continue helping families understand how these new tools fit into their broader financial picture.
How This Fits Into Your Family's Plan
Like any planning strategy, the real value comes from how it works alongside everything else.
For many families, this may complement existing strategies such as:
- 529 education plans
- gifting strategies
- estate planning
- wealth transfer goals
- Roth IRA opportunities later in life
The goal is not simply opening another account.
The goal is using the right tools to help create clarity, confidence, and long-term financial well-being.
Final Thoughts
New opportunities like this can be exciting, but the real value comes from thoughtful planning.
Starting early, contributing consistently, and aligning every decision with your family's long-term goals is what creates lasting impact.
Illustrative example assumes a 6% annual rate of return and is for informational purposes only. Actual investment results will vary and are not guaranteed.
If you'd like to discuss whether a Trump Account makes sense for your children or grandchildren, we'd be happy to help.
LFS Wealth Advisors — Wealth Management Simplified.
Advisory Services are offered through Creative Financial Designs, Inc., a Registered Investment Adviser. Securities are offered through cfd Investments, Inc., a Registered Broker/Dealer, Member FINRA & SIPC, 2704 S. Goyer Rd., Kokomo, IN 46902. 765-453-9600. LFS Wealth Advisors is not affiliated with the CFD Companies. All investments involve risk, including the potential loss of principal.