Building Wealth Early: What Parents Need to Know About Trump Accounts

At Golden Horizons Partners, our mission is to equip the next generation with the knowledge, resources, and tools they need to succeed and achieve long-term independence. Financial literacy and early investing are essential components of that foundation.

With new federal policy changes, a dedicated investment tool called Trump Accounts is available to help parents, guardians, and families kickstart their children's financial future. Here is everything parents need to know about how Trump Accounts work, how to sign up, and why long-term investing in index funds like the S&P 500 can be transformative for a child's future.

What is a Trump Account?

A Trump Account is a tax-deferred savings and investment account designed specifically for children under the age of 18. Functioning as a "starter IRA" for minors, it allows family members, employers, and organizations to invest on behalf of a child without requiring the child to have earned income.

Key Details & Program Features

• Government Seed Money ($1,000): Children born between January 1, 2025, and December 31, 2028, are eligible to receive a one-time $1,000 initial government contribution to launch their account.
• Annual Contribution Limit: Parents, family, and friends can contribute up to $5,000 annually per child.
• Employer Match Contributions: Employers can contribute up to $2,500 per year toward an employee's dependent child's Trump Account (which counts toward the $5,000 limit and is excluded from the employee's taxable income).
• Investment Focus: By law, funds in Trump Accounts are required to be invested in low-cost index funds that track broad U.S. stock market indices, such as the S&P 500. Management fees are capped at 0.10% (10 basis points).
• Growth & Access at Age 18: The funds grow tax-deferred. When the child turns 18, the account transitions into a traditional IRA. Penalty-free withdrawals can later be used for qualified expenses such as higher education or a first-time home purchase.

How to Sign Up and Activate Your Child's Account

Parents and legal guardians can enroll their children in a few steps:

1. 01

   Verify Eligibility

   Ensure your child is a U.S. citizen under age 18 with a valid Social Security Number.

2. 02

   File IRS Form 4547

   Complete and submit IRS Form 4547 (Election for Trump Account) online via TrumpAccounts.gov or through your IRS online account using ID.me. This form can also be filed alongside your annual federal tax return.

3. 03

   Select an Authorized Trustee

   Activate the account through official financial platforms (such as the official Trump Accounts portal or participating brokerage partners) to manage recurring deposits or employer matches.

The Power of the Market: S&P 500 Historical Performance

The decision to anchor Trump Accounts in low-cost U.S. stock index funds (like S&P 500 ETFs) highlights the impact of long-term compound growth. Historically, the stock market experiences short-term fluctuations, but holding investments over extended periods has consistently delivered strong gains.

What This Means for Your Child

Due to compound interest, starting early makes a dramatic difference. A single $1,000 seed deposit left untouched in an S&P 500 index fund growing at an average annual return of 10% could grow to over $5,500 by the time the child turns 18 — without adding another dollar.

Adding even modest monthly contributions (e.g., $50 to $100 per month) alongside the initial boost can build a substantial financial cushion for college, vocational training, or a first home by adulthood.