What Advisors Are Hearing About Trump Accounts

As Washington’s latest legislative proposals reshape the personal finance landscape, one provision is generating outsized buzz in advisor-client conversations: Trump Accounts. Formally structured as a new savings vehicle, these accounts have sparked a surge of questions from investors eager to understand eligibility, contribution rules and long-term planning implications.

Jeffrey Levine, Chief Planning Officer at Focus Partners Wealth, is on the front lines of that dialogue. A specialist in evidence-based forecasting and complex financial policy, Levine works closely with advisors to translate dense legislative language into actionable guidance. He shares what clients are asking, what advisors need to understand and how to approach Trump Accounts with clarity and confidence.

CM: What is driving the surge in interest about Trump Accounts among clients right now?

JL: Perhaps the single biggest factor is the impending go-live date. Notably, while Trump Accounts have been “a thing” since the enactment of the One, Big, Beautiful Bill Act (OBBBA), that same law put a one-year hold on when the accounts could be established and funded. We’re rapidly approaching that deadline, and so there is a commensurate increase in learning more about them as we near the go-live July 4, 2026 date.

Another major factor is the fact that those with Trump Accounts may be entitled to “free money.” The big one here is the Trump Account Pilot Program, which provides for a $1,000 federally provided contribution to the Trump Account of a child born from 2025 through 2028, but Trump Account beneficiaries may also be entitled to other “free money,” such as from charitable organizations (e.g., via the Dell’s multi-billion pledge) or a parent’s employer.

It’s also worth noting that the mere name, “Trump Accounts,” is driving interest. While views of the President vary widely – to say the least – from person to person, objectively, anything that has his name on it tends to draw more attention.

CM: Are there income thresholds, age restrictions or other eligibility requirements clients should be aware of before assuming they qualify?

JL: There are a variety of rules surrounding eligibility for Trump Accounts, but the most significant relates to the beneficiary’s age. Specifically, Trump Accounts can only be established for individuals prior to the year in which they reach their 18th birthday.

Similarly, Trump Account contributions can only be made up through the year a child reaches age 17. These contributions are subject to a $5,000 per year limit per beneficiary (adjusted for inflation), and do NOT require the beneficiary to have any sort of income, earned or otherwise. Once the child reaches the year in which they turn age 18, though, the account effectively turns into a “regular, plain, old IRA” account, and becomes subject to the regular IRA rules. Those rules include the higher IRA contribution limit (currently $7,500), but also the requirement that the IRA owner have “compensation,” which is generally earned income.

CM: How do Trump Accounts compare to existing savings vehicles — such as 529 plans, Roth IRAs or custodial accounts — and where do they fit within a broader financial plan?

JL: This is really the big planning question that a lot of advisors must wrestle with on behalf of their clients. Just because you can do something doesn’t mean that you should, right? When considering Trump Accounts, I think there are two very distinct situations to consider. The first is the potential for “free money.” Free money is good for clients (or their children, grandchildren, etc.). I’ve yet to be convinced otherwise. And so, with that in mind, establishing a Trump account for a child born from 2025 – 2028 to get the $1,000 Pilot Program contribution is sort of a no-brainer. In fact, establishing a Trump Account for any child– even those who are older – might make sense just to make sure that if there are ever future charitable contributions to which they’re entitled, they get them.

The second situation is where a family is fortunate enough to have discretionary capital that they want to use for a child’s benefit. In that case, the question becomes, “What is the best vehicle to use to accumulate funds on behalf of the child?”

Frankly, the answer to this question is going to vary from client to client, in part due to the primary purpose of the funds. For instance, if we’re talking about putting away money for a child’s college education, then contributing the funds to a 529 plan is likely to be the right move in most situations. The tax-free nature of 529 plan distributions used to pay for qualified higher education expenses is difficult to beat.

If, on the other hand, the funds are intended to be used for a wide variety of potential future expenses, such as a down-payment on a first home, or a wedding fund, then a UTMA may be best because it provides a lot of distribution flexibility without penalties. Or maybe we’re talking about Grandma and Grandpa putting money away for their grandchild’s future retirement. In that case, a UTMA account could still be a good choice, but the Trump Account – coupled with Roth conversions, once eligible, in low-income years – could be another solid option.

While facts and circumstances will dictate different “best” options in different situations, one broad statement that can be made about Trump Accounts is that they are best positioned and thought of as retirement accounts first. That doesn’t mean the money can’t be used for other purposes, but rather, simply that the rules for Trump Accounts, such as the application of the 10% early distribution penalty to pre-59 ½ distributions, make them a “retirement-first” tool.

CM: What are the tax implications advisors should be walking clients through, both on the contribution side and at the point of withdrawal?

JL: On the contribution side of things, I think the biggest thing for people to know is that the “regular” Trump Account contributions of up to $5,000 per year are non-deductible contributions. In other words, people get no tax benefit up front for making those contributions.

Like other tax-preferenced accounts, interest, dividends and capital gains earned inside a Trump Account are tax-deferred. Ultimately, once distributions are made from the account, the pre-tax portion of the distribution will be subject to ordinary income tax. One bit of good news here for clients is that unlike IRAs – which require that clients keep track of their basis in those accounts on their own, via Form 8606 – rules proposed by the IRS would require custodians to keep track of this information for clients on new Form 5498-TA.

CM: How are you modeling Trump Accounts in your forecasting work, and what are you stress-testing for under different policy or market scenarios?

JL: My modeling of Trump Accounts has been primarily focused on the after-tax value of such accounts when compared to using other options, such as 529 plans and UTMA accounts. The modeling is clear that the 529 plan remains the vehicle of choice for savings if the proceeds of the account are used to pay for college or graduate school. Beyond that, there’s an argument to be made for both a UTMA account and a Trump Account if the funds are to be used for the child’s future retirement.

Ultimately, deciding which is better involves making a lot of assumptions about how the child will invest the proceeds after they reach age 18. In short, the more tax-efficient that they are with their future investing, the more a UTMA makes sense for those early-year contributions. By contrast, the less tax-efficient that the child is with their future investing, the more the Trump Account, with its long-term tax-deferral (via its transition into an IRA at age 18), makes sense for the same contributions.

In terms of modeling different market scenarios, it’s more about what people choose to invest in within their various account options, rather than the accounts themselves. That said, one of the requirements for Trump Accounts is that prior to the year that the beneficiary reaches age 18, the funds must be invested in a low-cost index tracking a US market. Accordingly, if US markets underperform international markets during that time, you can make the argument that from an investment perspective, a Trump Account beneficiary would be at a disadvantage compared to a 529 plan or UTMA beneficiary, who would have access to more foreign markets.

CM: Are there particular client demographics showing the strongest interest in Trump Accounts today?

JL: Yep. Not surprisingly, the strongest interest is coming from parents of children eligible for the accounts, and particularly from new parents, whose children are eligible for the $1,000 Pilot Program contribution. Everyone likes free money!

CM: Where do you think the greatest confusion exists when it comes to contribution rules and eligibility requirements for Trump Accounts?

JL: By far, the most confusing aspect of Trump Accounts is the contribution rules. Notably, there are five different types of contributions that can potentially be made to a Trump Account. They are 1) “regular” contributions made by a beneficiary’s family, 2) employer contributions, 3) Pilot Program contributions, 4) Charitable contributions, and 5) rollover contributions. Let’s remove rollover contributions for a moment and focus on the first four types of contributions, which all represent new money going into a Trump account.

The first major area of confusion is that not all the contributions are subject to the annual $5,000 limit. In fact, only the regular contributions and employer contributions – which are also subject to a separate $2,500 annual limit, per employee – are subject to the annual $5,000. So, for instance, if a client’s employer contributes $1,000 to the Trump Account of their child this year, the client can only contribute an additional $4,000 to the same Trump Account. By contrast, if a Pilot Program contribution of $1,000 goes into a newborn beneficiary’s account, the parents of that child can still contribute an additional $5,000 in the same year.

The second major area of confusion relates to the tax treatment of the various Trump Accounts. This one is a bit simpler. Here, only the regular contributions create basis in the account. This means that those contributions should not be taxed again when they are ultimately distributed. By contrast, employer contributions, Pilot Program contributions and charitable contributions all go in as pre-tax amounts, meaning that just like earnings, they will be subject to ordinary income tax when they are distributed.

Just for fun, I’ll note that the Required Minimum Distribution rules for Trump Accounts are also really confusing, especially when the beneficiary also has Traditional IRAs. But the first time one of those RMDs is going to be needed will be when the oldest Trump Account beneficiary reaches age 75. That’s more than 50 years from now! The chances of the rules going unchanged for that long are really small, so I wouldn’t suggest most advisors spend much time, if any, on them for the time being.