2025–2028 gets the $1,000 federal seed
Per year, from parents/family/friends
Per year, up to $2,500 — counts toward the family cap, not on top of it
Why does this share a cap with family contributions?
4–10%, illustrative — not guaranteed
18 or later — the account converts to a traditional IRA at 18
Projected balance
$0
- Tax-free (your contributions)
- $0
- Taxable if withdrawn (seed + employer + growth)
- $0
- 10% early-withdrawal penalty
- $0
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.
Reviewed by RuleCost Editorial Team, Editorial Team. Rules for 2026, updated 17 Sept 2026.
How to use it
- 1Enter the child's birth year — this decides whether they qualify for the $1,000 federal seed (children born 2025–2028 do).
- 2Enter how much family and friends plan to contribute each year, and any employer contribution.
- 3Adjust the assumed annual return and the age you want to project the balance to.
- 4Read the projected balance, split into the tax-free portion (your contributions) and the taxable portion (the seed, any employer money, and all investment growth).
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contributions (after-tax, non-deductible) — this is IRS-recognized “basis,” and comes out tax-free no matter when it’s withdrawn.
- The $1,000 seed and any employer contributions — pre-tax money, fully taxable as ordinary income when withdrawn.
- Investment growth — always taxable as ordinary income when withdrawn, same as growth inside a traditional IRA.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.
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).