{"id":739,"date":"2026-05-28T16:06:57","date_gmt":"2026-05-28T16:06:57","guid":{"rendered":"https:\/\/americanhomejournals.com\/?p=739"},"modified":"2026-05-28T16:06:57","modified_gmt":"2026-05-28T16:06:57","slug":"im-a-financial-planner-and-dad-trump-accounts-come-with-a-free-1000-but-i-still-prefer-my-current-savings-strategy","status":"publish","type":"post","link":"https:\/\/americanhomejournals.com\/?p=739","title":{"rendered":"I’m a financial planner and dad. Trump Accounts come with a free $1,000, but I still prefer my current savings strategy."},"content":{"rendered":"
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The passage of the One Big Beautiful Bill Act in 2025 included the creation of a new type of individual retirement account called Trump Accounts. These accounts are designed to be tax-advantaged, long-term savings vehicles for families to leverage on behalf of children born in the US between 2025 and 2028.<\/p>\n

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Seemingly even better than the tax benefits is the fact that the accounts include a $1,000 government deposit when they’re opened. Families can also make annual contributions of up to $5,000, which can be invested until the child turns 18.<\/p>\n

This benefit caught my eye \u2014 I’m a financial planner with many clients who are parents, am a parent myself, and am always interested in better understanding potential financial benefits for my 4-year-old daughter.<\/p>\n

I jumped at the opportunity to analyze the benefits and drawbacks of these accounts, both for myself and for my clients. Here’s what I found, and what I’ve shared with clients.<\/p>\n

The biggest benefit: an extra $1,000 to your name<\/strong><\/h2>\n

Let’s start with the $1,000 deposit made by the Federal government for children born between January 1, 2025, and December 31, 2028, who are US citizens with a Social Security number. This is the primary highlight of Trump Accounts.<\/p>\n

If you have an eligible child, signing up to receive the deposit is worth considering. While an extra $1,000 on your balance sheet is great, that alone may not be enough to make Trump Accounts a superior savings option for your own cash versus alternative vehicles.<\/p>\n

There are specific reasons that the combination of a\u00a0529 plan\u00a0and a taxable investment account serves as a better option for your own contributions to your children’s financial future.<\/p>\n

A 529 plan allows for more college savings<\/strong><\/h2>\n

A Trump Account acts similarly to a traditional IRA, except that a child doesn’t need earned income to contribute. Withdrawals after age 18 are subject to ordinary income tax, with a 10% penalty if withdrawn before age 59\u00bd, unless used for qualified education expenses or a first-time home purchase (both limited in nature).<\/p>\n

If your primary goal is to save for college, I usually recommend using a 529 plan for ongoing cash contributions over a Trump Account because:<\/p>\n

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