Time.

Not time in the philosophical sense. Time when it comes to money.

If someone had invested $1,000 for me when I was born and then consistently added money to it throughout my childhood, that account would have had decades to grow before I ever really needed it.

That’s the idea behind the new Trump Accounts.

There has been plenty written about them since they were created in 2025, but I think the basic concept is actually pretty simple: give kids an investment account early in life and let compound growth do what compound growth does best—work over a very long period of time.

And as a financial advisor—and a dad—I think that’s worth paying attention to.

What Exactly Is a Trump Account?

A Trump Account is a new type of individual retirement account created specifically for children.

Parents or other authorized individuals can establish one for an eligible child who has a Social Security number, as long as the election is made before the calendar year in which the child turns 18.

The feature that has received the most attention is the government’s contribution.

For children who are U.S. citizens born between January 1, 2025 and December 31, 2028, the federal government will make a one-time $1,000 contribution to the child’s account if the appropriate election is made.

But I actually think focusing exclusively on the $1,000 misses the bigger story.

Parents, grandparents and other individuals can contribute as well. During the child’s growth period, generally up to $5,000 per year can be contributed from sources subject to the annual limit. That limit is scheduled to begin adjusting for inflation after 2027. Certain government and charitable contributions don’t count against it.

Employers can even contribute toward the Trump Accounts of employees or their dependents. Up to $2,500 per year of qualifying employer contributions can be excluded from the employee’s income, although those contributions count toward the $5,000 annual limit.

That’s where this starts getting interesting.

Let Me Give You an Example

Imagine a baby born in 2026.

Her parents open a Trump Account and she receives the $1,000 government contribution.

Then Mom and Dad decide to contribute $100 per month.

That’s $1,200 per year.

It doesn’t sound life-changing.

But that’s exactly the point.

You don’t necessarily need a life-changing amount of money when you have a life-changing amount of time.

That money can potentially compound for decades.

And maybe Grandma and Grandpa add some money at Christmas instead of buying another toy that will be forgotten six months later.

Maybe the parents increase their contribution as their income increases.

Maybe an employer eventually contributes.

Suddenly, what started as a $1,000 account for a baby becomes something much more meaningful.

That’s the part of Trump Accounts that I find most compelling.

We’re introducing children to ownership and investing before they can even spell either word.

What Can Time Actually Do?

Let’s put some numbers behind this.

Take the same child from our example. She starts with the $1,000 government contribution, and her parents contribute just $100 per month.

If we assume an average annual return of 7%, here’s approximately what that account could grow to:

• Age 18: $44,000
• Age 30: $121,000
• Age 50: $517,000
• Age 65: $1.46 million

Think about that for a second.

Mom and Dad didn’t have to write a huge check. They simply started with $100 per month and gave the money something you can’t buy later: time.

Obviously, investment returns aren’t guaranteed, and actual results will vary. But the example illustrates why starting early can be so powerful.

Most people spend their 20s, 30s and sometimes even their 40s wishing they had started investing sooner.

A child with an account like this doesn’t have to.

They get to start at birth. The Investment Rules Are Intentionally Simple

Before the child reaches adulthood, Trump Accounts aren’t designed to be trading accounts.

The investments generally must be low-cost mutual funds or ETFs tracking broad indexes of primarily U.S. companies, such as the S&P 500. The funds can’t use leverage, and annual expenses generally cannot exceed 0.10%.

I actually like that.

There is no need to figure out which individual stock is going to be the next big winner.

The basic idea is:

Own a broad piece of American business. Keep the costs low. Leave it alone. Give it time.

That’s not a bad investing lesson for an 8-year-old.

Frankly, it’s not a bad investing lesson for a 48-year-old either.

There Is a Catch: This Isn’t a Savings Account

One important distinction is that a Trump Account isn’t designed as a piggy bank that parents can tap whenever they want.

During the growth period, distributions generally aren’t permitted. Beginning in the calendar year the child turns 18, most of the special Trump Account rules go away and the account generally becomes subject to traditional IRA rules.

That means withdrawals after that point need to be considered carefully.

Depending on how the money is withdrawn and used, taxes and potentially the 10% early-distribution penalty can apply. Traditional IRA exceptions may also apply—for example, certain qualified higher-education expenses or qualifying first-home purchases.

There is another tax wrinkle worth understanding.

Money contributed by parents, grandparents or other individuals during the growth period is generally a nondeductible contribution and creates basis in the account. The growth on that money is tax-deferred. Government pilot contributions, certain charitable/government contributions and qualifying employer contributions receive different basis treatment.

In other words, this isn’t simply a Roth IRA for a child.

The tax rules matter.

What About a 529?

This will probably be one of the first questions people ask us.

“Should I fund a Trump Account instead of my child’s 529?”

I don’t think that’s necessarily the right way to look at it.

A 529 has a very specific purpose and potentially powerful tax advantages when the money is used for qualified education expenses.

A Trump Account serves a different purpose.

And families don’t necessarily have to choose one or the other.

For some families, the right answer may be a 529.

For others, it may be a Trump Account.

For many, it could eventually be both.

The decision should start with what you’re trying to accomplish for the child.

The Bigger Lesson

I think Trump Accounts provide parents with something even more valuable than another place to put money.

They provide an opportunity to teach.

Imagine sitting down with your 10-year-old and showing her an account that has been growing since she was born.

You can explain what a stock is.

You can show her that she owns tiny pieces of hundreds of American companies.

You can show her what happens when investments go down—and why we don’t panic.

You can show her what happens when $100 gets added every month.

Most importantly, you can show her what happens when we don’t spend everything we make.

Those lessons may ultimately be worth more than the account itself.

How Do You Open One?

Trump Accounts officially became available to fund beginning July 4, 2026. Parents and other authorized individuals can make the election through the IRS using Form 4547, including through the IRS Individual Online Account. The IRS says the online election process generally takes about five to ten minutes.

For children born from 2025 through 2028 who qualify for the government’s $1,000 pilot contribution, that election can be made as part of the process.

One thing families should know is that the current system is largely designed as a direct-to-consumer process. Your financial advisor generally isn’t simply opening the initial account for you the same way we might open and manage a traditional investment account.

That doesn’t mean you should figure everything out alone.

We can help you understand how a Trump Account fits alongside your family’s other savings, retirement, education and estate-planning strategies.

My Takeaway

I’m always hesitant when a new financial product or account gets a lot of attention.

New doesn’t automatically mean better.

And a Trump Account isn’t going to replace good financial planning.

But I do like the fundamental idea behind this one.

Start early. Invest consistently. Keep costs low. Own productive assets. Give compound growth as much time as possible.

Those principles have been around a lot longer than Trump Accounts.

If this new account encourages more families to put those principles into practice for their children and grandchildren, I think that’s a conversation worth having.

Because the biggest advantage we can give the next generation may not be picking the perfect investment.

It may simply be giving them a 20-, 30-, or 40-year head start.