My name is Evan Vladem, and I’m a partner and financial advisor at Associated Investor Services. I get it... talking about money can be intimidating... So, we created a judgment-free space where there are no "dumb" questions or embarrassing situations.
Everything and anything is welcome, and we'll provide our best answers and/or guidance. Feel free to submit questions or letters directly to me via email HERE. You have my word, your identity will remain anonymous to our readers.
Dear Evan,
We recently had a baby and keep hearing about these “Trump Accounts,” but we don’t really know much about them. Can you explain what they are, how they work, and how we could set one up for our daughter?
Sincerely,
-Curious Parents
Dear Curious Parents,
First off, congratulations on the new baby! That’s a huge milestone.
My wife and I are actually expecting our first child this summer, so this topic is especially top of mind for me too.
At a high level, a “Trump Account” is essentially a child-focused retirement savings account designed to give kids an early investing head start. It functions similarly to a traditional IRA, but it’s established for minors and funded by parents or family members.
For eligible children (currently those born between 2025 and 2028), the government provides a $1,000 seed contribution. Families, and in some cases employers, can add additional money each year, currently up to $5,000. The funds are typically invested in diversified, low-cost investments and grow tax-deferred over time.
The tradeoff is access and flexibility.
In most cases, the money can’t be accessed until January 1 of the year your child turns 18. After that, the account is generally treated like a traditional IRA - meaning withdrawals are taxable, and taking funds out before age 59½ may trigger penalties unless an exception applies (such as education or first-home expenses).
Can this be used alongside other accounts? Often, yes.
A custodial Roth or traditional IRA may still make sense if your child has earned income, and many families also use a 529 plan for education savings. Since Trump Accounts have their own contribution limits, they can sometimes complement - not replace - these other tools.
So, should you do it?
For many families, the benefits include the early start, the government seed money, and decades of potential compounding. However, the reduced flexibility and long-term tax considerations mean it should fit into a broader financial plan, not exist in isolation.
If you’d like help mapping out how this could work alongside education planning, tax strategy, and long-term wealth building, we’re happy to walk through it with you. Starting early can make a meaningful difference - and you’re already ahead of the curve just by asking the question.
Cheers!
-Evan Vladem
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