Your Child Now Has a Trump Account. Here Is What to Do Next.

Starting October 1, 2026, the Treasury Department is opening a Trump Account for every child under 18 with a Social Security number who does not already have one. You did not have to sign up. But the account alone does not get you the money. If your child was born from 2025 through 2028, the $1,000 government deposit still requires one election from you, and no one else can make it.

If you are a parent, you probably saw the headline and wondered whether you need to do anything. You do, and it takes about ten minutes. Below are the three steps, what your child actually gets, and how I think about where this account fits next to a 529.

What changed on October 1, 2026?

The IRS now opens an "auto account" for eligible children instead of waiting for parents to apply. Treasury issued temporary regulations effective September 30, 2026, after the IRS had processed only about 5.6 million electronic elections against roughly 73 million eligible children as of July 30. Treasury expects auto-enrollment to add more than 60 million accounts this year, covering about 73 million children in 44 million families, and roughly 2 million new accounts a year after that.

The catch is in the fine print. An auto account sits in a pooled Treasury trust until you claim it. It cannot receive money from you, your family, or your employer until then, and it does not trigger the $1,000 deposit on its own.

What do I need to do? Three steps

Claim the account, elect the $1,000 if your child qualifies, and check for free money from your employer. That is the whole list.

1. Claim the account. Sign in at trumpaccounts.gov or in the Trump Accounts app. You will verify your identity and confirm you are the parent or legal guardian. Once claimed, the balance moves into an account in your child's name that you can see and add to.
2. Elect the $1,000 (children born 2025 through 2028). Make the pilot program election in the app, on the website, or on IRS Form 4547. Your child must be a U.S. citizen with a Social Security number. Treasury deposits the money as soon as practicable after you elect.
3. Check for free money. Ask HR whether your employer contributes. More than 50 companies have announced contributions, and employers can put in up to $2,500 a year tax-free. If your child is 10 or younger and you live in a ZIP code with a median income of $150,000 or less, they may also receive a $250 gift from the $6.25 billion Michael and Susan Dell pledge, which began depositing in late August 2026.

If you already filed Form 4547 earlier this year, you are done with steps one and two. Log in to confirm the deposit landed.

What does my child actually get?

Your child gets an investment account that grows untouched until 18, seeded with up to $1,000 from Treasury and open to up to $5,000 a year from you and others. The money must be invested in low-cost U.S. stock index funds charging no more than 0.1% a year.

How much could $1,000 grow into?

At a 7% average annual return, the $1,000 deposit alone grows to about $3,400 by age 18. Adding $1,000 a year brings it to about $37,000. Left alone until 65, the original $1,000 becomes about $81,000. The deposit matters, but steady additions matter far more.

Hypothetical illustration only, not a projection of actual results. Figures assume the stated inputs and returns, which are not guaranteed; your outcome depends on your contributions, investment returns, tax rates, and time horizon. Past performance does not guarantee future results.

You can run your own contribution amount through the time value of money calculator to see what a different monthly number does over 18 years.

How is the money taxed when my child takes it out?

Growth is tax-deferred, not tax-free. Starting January 1 of the year your child turns 18, the account follows traditional IRA rules. Withdrawals are taxed as ordinary income, except for the after-tax dollars you contributed. The $1,000 deposit, employer money, the Dell gift, and all the growth are taxable when withdrawn.

A 10% penalty generally applies to withdrawals before age 59½. The usual IRA exceptions apply, including qualified higher education costs and up to $10,000 for a first home. Your contributions are not tax-deductible going in.

Should I use a Trump Account or a 529?

Collect every free dollar in the Trump Account first. After that, if your goal is college, a 529 plan usually beats it, because qualified 529 withdrawals are tax-free while Trump Account growth is taxed as income. Here is how I rank the next dollar for most families I work with:

Grandparents asking how to help is the most common version of this question I hear. A Trump Account is a simple, low-cost place for a birthday gift that grows for decades. A 529 is the better home if the gift is meant for tuition.

Who can help me decide what to do with it?

For most families, the three steps above are enough on their own. The decision gets harder when you are weighing several children, a grandparent who wants to give, an employer contribution, and college savings at once. I'm Jay Chang, a VP, Wealth Advisor at Farther, and I help parents decide which account gets the next dollar based on their tax bracket, their state's 529 deduction, and what the money is actually for.

Frequently asked questions

Primary sources: trumpaccounts.gov, the IRS Instructions for Form 4547, and CNBC's coverage of the October 1 auto-enrollment.