We’re excited to share an important update that may be of interest to you and your family. On July 4, 2025, President Trump signed into law a wide-ranging tax bill that many around the country have been watching closely. The bill includes the creation of “Trump Accounts” — a new savings vehicle designed to help families invest in their children’s futures with tax-advantaged growth and flexible use options.
Trump Accounts share features with Roth IRAs and 529 plans—including after-tax contributions, tax-deferred growth, and favorable tax treatment for qualified withdrawals. Unlike Roth IRAs, gains aren’t fully tax-free but are taxed at reduced capital gains rates. And while 529s are limited to education, Trump Accounts offer broader uses, including housing and disability expenses. They’re not a replacement but may prove to be a strong complement to other savings strategies, especially when started early.
Available to all U.S. citizens under age 18, these accounts include a special provision for children born between January 1, 2025, and December 31, 2028. For eligible newborns, the federal government will automatically contribute $1,000. If a parent doesn’t open one, the Treasury will establish and fund the account when a tax return lists the child as a dependent. Families can contribute up to $5,000 per year per child using after-tax dollars.
Funds must be invested in low-cost, diversified mutual funds or ETFs that track a U.S. stock index, with annual fees of 0.1% or less—ensuring more of your money stays invested and working for your child’s future.
Accounts grow tax-deferred. While contributions aren’t deductible, qualified withdrawals are taxed at favorable capital gains rates. Funds can be used for education, first-time home purchases (up to $10,000), disability-related costs, and up to $5,000 for the birth or adoption of a child. Non-qualified withdrawals before age 59½ may be subject to income tax and a 10% penalty.
One of the best parts of our job as wealth advisors is working with the 2nd, 3rd, or even 4th generation of our client families. If you have children or grandchildren who may be eligible, we’d be happy to walk you through the details and help you determine how these accounts might fit into your overall financial strategy. As always, our goal is to help you make informed decisions that support your long-term goals and carry on your Legacy.
While the framework is in place, the IRS and financial institutions are still finalizing implementation. Trump Accounts are expected to become available starting January 1, 2026. In the meantime, we can help you prepare by identifying eligible children, planning contributions, and reviewing your strategy in conjunction with your comprehensive Financial Plan.
It is a great privilege to serve as your financial advisor and wealth manager. Please don’t hesitate to reach out with any questions or to schedule a time to discuss further.
July 2025
LPL Financial and Allen & Company do not provide tax advice or services.
