![\"A](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/08\/tos-l-trump-account-website.jpg\")
A screenshot from TrumpAccounts.com showing the White Houses’ projected growth potential for Trump Accounts. (TrumpAccounts.com)<\/p>\nKarla Perez and her husband are supporters of President Donald Trump, so when they learned this summer about new investment accounts his administration designed for children, they quickly signed up their one-year-old son.<\/p>\n
\u201cWhat we hope is that when he\u2019s 18 and he can access it, that he has money to set up his future, whatever he wants to do with it,\u201d said Perez, 29, of Orlando, who plans on depositing $2,000 a year into her son\u2019s account with the expectation that by the time he hits adulthood, it will be worth six figures.<\/p>\n
\u201cHe\u2019ll have access to use it if he decides he wants to open a business or purchase a home,\u201d she said. \u201cSomething to help him have more flexibility when he goes into adulthood.\u201d<\/p>\n
Millions of children became eligible for the new \u201cTrump Accounts\u201d this summer, with those born during the president\u2019s second term eligible for a $1,000 donation from the federal government. The accounts are stock funds overseen by the federal government but with strings attached. At a July rally in Georgia, Trump touted them, saying every child in the country now has a \u201cgreat start in life and a really fair shot at the American dream.\u201d<\/p>\n
But some experts fear the accounts will further solidify the nation\u2019s wealth gap as more well-off parents contribute to their children\u2019s accounts while those in low-income households are unable to fund them. Others caution that, as an investment, Trump Accounts are not the best option for parents looking to give their children a financial leg up at age 18.<\/p>\n
\u201cI can see what the government\u2019s trying to do in encouraging learning about investing early on. I can give them kudos for that,\u201d said Tommy Lucas, financial advisor and part-owner at Moisand Fitzgerald Tamayo in Orlando. \u201cBut from a practical perspective, I would fill up different buckets first in 99% of scenarios before I\u2019m really looking into putting some serious money into these Trump Accounts.\u201d<\/p>\n
Parents whose young children qualify for the $1,000 donation should certainly open the accounts, Lucas said, but additional contributions might not make sense. The accounts are designed for retirement, so though there are exceptions that could give their children some money for school or housing, most withdrawals before age 59\u00bd will come with financial penalties.<\/p>\n
As of July 10, 6.5 million accounts have been set up, and $1.5 billion was deposited into them, according to the White House.<\/p>\n
Up to $5,000 a year can be contributed to each account. The money is invested in the stock market, and the Trump administration projects that if a family contributes the maximum allowable amount, the account could be worth up to $271,000 when a child turns 18.<\/p>\n
A screenshot from TrumpAccounts.com showing the White Houses’ projected growth potential for Trump Accounts. (TrumpAccounts.com)<\/p>\n
Individuals, employers, state and local governments and philanthropists can also contribute to the accounts. The Michael & Susan Dell Foundation, a family charity that helps impoverished children, for example, pledged $6.5 billion to give $250 to all children 10 and under living in zip codes with median annual incomes below $150,000. Under the program\u2019s rules, the foundation, however, is not allowed to direct its donations to low-income families but must give to all qualifying children in the selected zip codes.<\/p>\n
Lucas, who lives in a qualifying zip code, set up accounts for his four children and each got the $250 donation from the Dell foundation.<\/p>\n
\u201cAs the owner of a firm here, I don\u2019t need $250,\u201d Lucas said. \u201cBut if you\u2019re going to offer it up, it would be stupid not to take it.\u201d<\/p>\n
Giving charitable donations to families who don\u2019t need them is troubling as it comes when inflation is high, and the administration is slashing funding for social services and other supports that many families rely on, said Ashley Burnside, senior policy analyst at the Center for Law and Social Policy in Washington, D.C.<\/p>\n
\u201cThey\u2019ve made dramatic cuts to Medicaid, to SNAP,\u201d Burnside said, referencing federal programs that provide health insurance and help purchasing food. \u201cIf a parent can\u2019t afford groceries each month, it\u2019s going to be very unlikely that they \u2018re going to be able to put money away towards a child\u2019s account or towards college savings.\u201d<\/p>\n
When children turn 18, they can use the accounts towards the purchase of a first home, higher education and qualified medical expenses, but they will pay income taxes on any money withdrawn. If the money is taken out for nonqualifying expenses, they will pay an additional 10% penalty.<\/p>\n
For parents who can contribute, there are smarter options for college savings and for helping with home buying, said Kevin Smith, a financial advisor at Wealthspire in Maitland.<\/p>\n
He is advising his clients to set up the Trump Accounts to get any eligible donations but then put their money elsewhere.<\/p>\n
Smith recommends a 529 account for college savings because the money is tax and penalty free when used for education expenses.<\/p>\n
\u201cThey also allow you to change underlying beneficiaries if one child doesn\u2019t use all those funds,\u201d Smith said. \u201cAnd at the end, if there are leftover funds, you can convert those into Roth IRAs.\u201d<\/p>\n
For a downpayment on a first home, Trump Accounts limit the withdrawal to $10,000.<\/p>\n
\u201cWith how expensive houses are these days, $10,000 is not going to get you near what you need to put down,\u201d Lucas said, adding that if his clients want to help children save for a house he\u2019d suggest other lower-tax options that allow for bigger withdrawals.<\/p>\n
Jenny Pokempner, an attorney at the Youth Law Center in San Francisco\u00a0believes Trump Accounts are flawed because they don\u2019t target low-income families. A better option, she said, would be to model the accounts after Connecticut\u2019s baby bonds. That state program automatically sets up investment accounts for all babies whose parents are on Medicaid and gives them $3,200.<\/p>\n
Still, she believes the accounts are a good first step and said it is important that all families set them up, as they could serve as vehicles for future administrations to get money to needy families.<\/p>\n
\u201cThis could be a building block that, in future years, you do amend and create within these accounts more of the features some of us would like to see,\u201d Pokempner said. \u201cBut that\u2019s a longer game kind of project.\u201d<\/p>\n
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