# Trump Account calculator

Project your child's Trump Account balance from birth to withdrawal, and see how much of it would actually be tax-free.

A Trump Account is a tax-advantaged savings account for children under 18, created by the 2025 tax law (IRC §530A). Children born 2025–2028 receive a one-time $1,000 federal seed; after that, family and employers can contribute up to a combined $5,000 a year, invested in a low-cost U.S. stock index fund, until the account converts to a traditional IRA at age 18.

## How this calculator works

The projection compounds once a year: any contribution made during a given year of the child's life earns the assumed return starting the following year. The $1,000 seed and the first year of contributions land the year the account can actually accept money — July 4, 2026, or the child's birth year, whichever is later — not necessarily at birth.

Three separate totals are tracked, because they're taxed differently once the account becomes an IRA at 18:

- **Family contributions** (after-tax, non-deductible) — this is IRS-recognized "basis," and comes out tax-free no matter when it's withdrawn.
- **The $1,000 seed and any employer contributions** — pre-tax money, fully taxable as ordinary income when withdrawn.
- **Investment growth** — always taxable as ordinary income when withdrawn, same as growth inside a traditional IRA.

A withdrawal before age 59½ also owes the standard 10% early-withdrawal penalty on the taxable portion, unless it qualifies for one of the exceptions that apply to traditional IRAs generally (for example, up to $10,000 toward a first home, or qualified higher-education expenses).

## A worked example

A child born in 2026, with $100 a month ($1,200 a year) contributed by family and no employer contribution, at an assumed 7% annual return:

| At age | Balance | Tax-free (basis) | Taxable if withdrawn |
|---|---|---|---|
| 18 | ~$47,035 | $21,600 | ~$25,435 |
| 25 | ~$75,527 | $21,600 | ~$53,927 |
| 65 | ~$1,130,982 | $21,600 | ~$1,109,382 |

These numbers assume the same $1,200 contribution every year through age 17, a constant 7% return, and no withdrawals — real accounts won't track this exactly, which is the whole reason to run your own numbers above rather than rely on someone else's example.

## Trump Account vs. a 529 plan vs. a custodial Roth IRA

| What differs | Trump Account | 529 plan | Custodial Roth IRA |
|---|---|---|---|
| Who can fund it | Anyone, up to $5,000/yr combined | Anyone, high limits | Only up to the child's own earned income |
| Free money | $1,000 federal seed (2025–2028 births) | None | None |
| Investment choice | One low-cost U.S. stock index fund | Plan's own menu | Broker's full menu |
| Tax-free use | Any use, once taxes/penalty on the taxable portion are paid | Education expenses only, for full tax-free treatment | Contributions anytime; earnings tax-free after 5 years + a qualifying reason |
| Needs earned income? | No | No | Yes — the child must have a job |

The Trump Account's real advantage over a 529 is that the money isn't locked into education spending. Its real disadvantage next to a custodial Roth IRA is that most of the balance (everything except your own contributions) is taxable on the way out — a Roth IRA's earnings can come out tax-free entirely, but only if the child has earned income to contribute in the first place.

## How to use it

1. Enter the child's birth year — this decides whether they qualify for the $1,000 federal seed (children born 2025–2028 do).
2. Enter how much family and friends plan to contribute each year, and any employer contribution.
3. Adjust the assumed annual return and the age you want to project the balance to.
4. Read the projected balance, split into the tax-free portion (your contributions) and the taxable portion (the seed, any employer money, and all investment growth).

## Questions

### What is a Trump Account?

A Trump Account is a tax-advantaged investment account for U.S. children under 18 with a Social Security number, created by Section 530A of the tax code. It invests in a low-cost fund tracking a broad U.S. stock index and converts to a traditional IRA when the child turns 18.

### Who gets the $1,000 seed money?

Children who are U.S. citizens with a valid Social Security number and were born between January 1, 2025 and December 31, 2028. The seed is a one-time federal contribution and doesn't count against the annual contribution cap.

### How much can be contributed each year?

Family, friends, and an employer can contribute a combined $5,000 a year (2026 and 2027; adjusted for inflation after that). An employer's own contribution is capped at $2,500 a year, counted toward — not on top of — that $5,000 total. Contributions can't begin before July 4, 2026, and must stop before the child turns 18.

### Can money be withdrawn before the child turns 18?

No. Before 18, the only permitted movements are a same-account rollover, correcting an excess contribution, or a payout after the child's death — there's no hardship exception.

### What happens to the account at 18, and is it taxed?

At 18 the account automatically becomes a traditional IRA. Family contributions come out tax-free, since they were made after-tax. The $1,000 seed, any employer contributions, and all investment growth are taxed as ordinary income when withdrawn, plus a 10% early-withdrawal penalty unless the withdrawal qualifies for an exception (for example, buying a first home, up to $10,000, or turning 59½).