After TaxTax Playbook

Tax Playbook · Big life moves

Trump Accounts: a head start for your kid

On July 4, 2026, a brand-new kids' savings account opened for business. Kids born from 2025 through 2028 can get a free one-time $1,000 from the federal government, and parents, grandparents, or employers can add up to $5,000 a year. Until age 18 the money can only sit in cheap U.S. stock index funds — and since money doubles roughly every nine years, birth-to-18 is two free doublings (the $1,000 seed alone is about $4,000 at 18) before your kid ever works. At 18 it converts to a regular IRA, so the growth is taxed as ordinary income when it comes out, and you cannot touch the money before 18 — a retirement head start, not college money.

Good for: For parents of U.S. kids born 2025–2028 who want to claim the free $1,000 seed.

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Educational summary, not tax advice. Limits and rules change — confirm current law with your tax adviser.