A New Investment Account Opens the Day America Turns 250
- On July 4, America turns 250 — and families can begin investing in the next 250 years through a new account for children
- The mechanics are straightforward; the planning questions around gift tax, Roth conversion timing, and how this fits your existing accounts are not
- To help families consider the potential of these accounts, we’ve built a calculator (below)
- Before you fund one, consider a conversation with your CPA and advisor
Most of the accounts our children will retire on don’t exist yet. This one becomes available July 4. Starting then, the One Big Beautiful Bill Act (“OBBBA”) makes it possible to open a Trump Account — a new tax-deferred savings vehicle for children under 18. On the day America turns 250, families can begin investing in the next 250 years. Whether you’re a grandparent thinking about your grandchild’s financial future, a parent of a newborn, or already saving through a 529, this article walks through the key details, the planning opportunities, and our perspective on where these accounts fit.
We’ve created an easy-to-use calculator tool that allows you to estimate how much a Trump account could grow by age 60. Try our calculator and continue reading to learn more about what a Trump account could mean for you.
A New Tool for Multigenerational Planning
If you’ve been looking for a structured way to invest in a child or grandchild’s future beyond the typical tools, the Trump Account offers an option — though it comes with real planning considerations.
Grandparents, parents, even family friends, can contribute to a Trump Account on behalf of a child. Contributions are made with after-tax dollars and are not deductible. A $5,000 annual funding limit applies per child. The limit is shared across all contributors (excluding funds from government or charities), so grandparents or others considering a gift should coordinate with the child’s parents.
The gift tax treatment of contributions deserves particular attention for families managing significant wealth. Recently, the IRS issued guidance creating a safe harbor, where contributions to a Trump Account can potentially be treated as “annual exclusion gifts” (currently $19,000 per donor per year, or $38,000 for a married couple), so they don’t reduce your lifetime gift and estate tax exemption. There is an important catch: the safe harbor applies only if you are not otherwise required to file — and do not otherwise file — a gift tax return for that year. If you must file a gift tax return for any reason, Trump Account contributions fall outside the safe harbor and must be reported as gifts of “future interests,” which do reduce your lifetime exemption. Given the planning stakes, it’s worth talking with your CPA.
In addition to whether you qualify for the safe harbor or not, it’s also worth thinking about how a Trump Account sits alongside the 529 plans, UTMAs, Roth IRAs, and irrevocable trusts that already exist. This is a new tool, not a replacement for existing ones.
A Few Mechanics and Requirements
Trump Accounts function much like a traditional IRA: contributions grow tax-deferred, and withdrawals are generally taxed as ordinary income. A feature attracting considerable attention is the government’s one-time $1,000 contribution for children born between 2025 and 2028.
Additionally, philanthropists have set up various funds across the country to contribute to children’s accounts in underprivileged areas. For example, The Michael & Susan Dell Foundation may provide a $250 contribution to children who meet its eligibility requirements including those born before 2025 who are age 10 or younger and live in certain zip codes.
The accounts are limited to low-cost mutual funds or ETFs that track the S&P 500 or another broadly diversified U.S. stock index, meaning the account is effectively invested in U.S. equities. Fees are capped at 0.10%. Families comfortable with that concentration may view it as a feature rather than a limitation, particularly given the long investment horizon involved.
How Trump Accounts Compare
| Feature | Trump Account | 529 Account | Roth IRA |
| Annual Limit | $5,000 | No federal limit | $7,500 (2026, under 50) |
| Tax on Withdrawals | Ordinary income (taxable portion) | Tax-free (education) | Tax-free (qualified) |
| Investments | U.S. equity index only | Diversified (varies) | Broad (varies) |
| Employer Match | Up to $2,500/yr | Rare | N/A |
| RMD | Yes (age 75) | None | None (original owner) |
| Annual Exclusion Gift | If safe harbor met | Yes | Yes |
| Earned Income Required | No | No | Yes |
The Roth Conversion Window: A Planning Opportunity Worth Watching
One of the more sophisticated planning angles embedded in Trump Accounts is the ability to convert the pre-tax balance to a Roth IRA beginning at age 18. Here’s the consideration: a young adult in their first years of employment often occupies the lowest tax bracket of their lifetime. That period represents a potential opportunity to convert pre-tax savings to a Roth at a relatively low tax cost, allowing those funds to compound tax-free for decades. The sweet spot occurs once the child is no longer a dependent, but before they’re making a lot of money, often in their early-to-mid twenties.
This timing isn’t arbitrary: while a child remains a dependent, the so-called “kiddie tax” means only a small amount of income is taxed at the child’s own rate, with everything above that taxed at the parents’ rate — a treatment that applies to capital gains as well. Once the child is no longer a dependent, that constraint goes away, which is part of what makes this window the most tax-efficient point for a conversion. At that stage, if they’re earnings are low, they may have room to convert at a lower tax rate than they will be at later in life. Grandparents and parents who want to support this kind of conversion can do so through existing gifting strategies.
Before You Fund One
For those with a grandchild or child born between 2025 and 2028, learn about the $1,000 Federal Seed Gift and application requirements at trumpaccounts.gov. Consider contributions up to the $5,000 annual limit starting July 4. Don’t abandon your 529 plan for education savings, or Roth IRA (if your child has earned income). Depending on the situation and goals, you might want to consider multiple tools. Ask your CPA how the new gift tax safe harbor (IRS Revenue Procedure 2026-25) applies to you.
If your child was born before 2025, the $1,000 Federal Seed Gift isn’t available — but the account still may be worth opening, depending on what you already have in place. The question is whether a Trump Account adds real value alongside the 529 plans, UTMAs, Roth IRAs, and irrevocable trusts.
Our View
We’ve said for years that the act of saving and investing on behalf of children matters more than any particular account type. So we’re glad this one exists.
That said, the enthusiasm around Trump Accounts should be tempered with some caution. These are tax-deferred accounts, not tax-free ones, and decades of compounding growth will eventually be taxed as ordinary income. Recent IRS guidance has answered the gift tax question, but the safe harbor comes with conditions. Those details are worth a conversation before you fund anything — especially for those managing large estates.
The most valuable thing we can do is help you think through how a Trump Account fits — or doesn’t fit — within your family’s existing plan. If you have questions, please reach out to your Gryphon Wealth advisor.
A Note from Gryphon Wealth
We are proud to share that Gryphon Wealth will be offering a Trump Account matching program for the children of our team members. As a firm built on multigenerational planning, we believe in putting our conviction into action.
Sources
- One Big Beautiful Bill Act, signed July 4, 2025. congress.gov
- IRS Proposed Regulations, IR-2026-33, March 6, 2026. irs.gov
- U.S. Treasury Press Release, Secretary Bessent, January 28, 2026. home.treasury.gov
- Council of Economic Advisers, “Trump Accounts Give the Next Generation a Jump Start on Saving,” August 2025. whitehouse.gov
- Ben Henry-Moreland, “Why Taxable Custodial Accounts Are Better Than OBBBA Trump Accounts,” Kitces.com, December 24, 2025.
- Kiplinger, “The GOP Trump Account for Savings,” updated March 9, 2026.
- H&R Block, “2026 Trump Savings Accounts,” January 19, 2026.
- Charles Schwab, “The Ins and Outs of the New Trump Kids’ Accounts,” March 6, 2026.
- Tax Foundation analysis, reported in Rethinking65, June 12, 2025.
- Texas Tribune, “Michael and Susan Dell donate $6.25B to Trump Accounts,” December 2, 2025.
- CNBC, “Altimeter Capital’s Gerstner backs Trump accounts for kids in Indiana,” January 28, 2026.
- Invest America Foundation. investamerica.org
- IRS Revenue Procedure 2026-25, “Transfer Tax Safe Harbor for Certain Contributions to Trump Accounts,” June 29, 2026. irs.gov
Disclosures
Gryphon Wealth, LLC is an investment adviser registered under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training.
This material is presented solely for informational purposes and has been gathered from sources believed to be reliable; however, the adviser cannot guarantee the accuracy or completeness of such information. Nothing in this presentation is intended to serve as personalized investment, tax, or insurance advice. Advisory services are only offered to clients or prospective clients where the adviser and its representatives are properly licensed or exempt from licensure.
Opinions expressed are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Any opinions expressed are current only as of the time made and are subject to change without notice.
Past performance is not indicative of future results. This article was created with the assistance of artificial intelligence as part of the research and drafting process.
