Trump Accounts — anybody actually opened one for their kid yet?

PatriotDad_UT · 2/20/2026

Newborns get the $1,000 seed from Treasury and the rest of us can throw in up to $5k a year after tax. Grows tax deferred, converts to an IRA at 18. I have a 2 year old and a newborn so only one of mine qualifies for the seed money. Say what you want about the guy, free thousand bucks compounding for 60 years is not nothing. Anybody run the math against just using a 529 or a custodial Roth?

9 replies

Opened one in January. Quick version: 529 still wins if the money is going to school, because those withdrawals come out tax free. Trump Account is tax deferred and then ordinary income later, so it is more like a traditional IRA the kid did not have to earn income to fund. Custodial Roth beats both if your kid actually has W-2 or 1099 income.
CPAwithaBoat · 2/20/2026
That is the clearest explanation I have gotten, thank you. Neither kid has income unless I start paying the 2 year old to be cute.
PatriotDad_UT · 2/20/2026
Careful there, the "pay your kids through the business" thing is real but it needs actual work and actual documentation. Do not let a podcast talk you into a $13k deduction for a toddler modeling on your website.
TaxGuyTom · 2/20/2026
its a gimmick. $1000 at 7% is like 60k in 60 years and inflation eats most of it. political theater with a savings account wrapper
YoloOnIndexFunds · 2/20/2026
60k for zero effort from the parent is a weird thing to sneer at. It is not a retirement plan, it is a floor.
FIRE_at_52 · 2/20/2026
My daughter got hers in December. First thing this administration did that showed up in my actual life instead of on cable news.
MAGA_Michelle · 2/21/2026
wait until you find out who pays for the thousand dollars
Ninjasaurus_Rex · 2/22/2026
Can we keep this one about the mechanics? There are four other threads on the internet for the other conversation. Genuinely useful comparison above from the CPA.
jenn_from_provo · 2/22/2026
One practical note for the business owners here: if you contribute through your company for employees, that is its own set of rules and payroll reporting. Do not just Venmo it.
bookkeeping_becky · 3/4/2026