TaxEfficiency News & Analysis

Trump Accounts allow $5,000 annual contributions for children

Trump Accounts can be created for anyone under 18 with a valid social security number, allowing contributions up to $5,000 per year. The funds must be invested in a low-cost index fund and are accessible when the child turns 18. While withdrawals are tax-free if used for qualifying expenses, they may incur a 10% penalty if accessed early. This program aims to increase stock ownership among younger and lower-income families, although its complexity may limit participation. For ordinary investors, understanding this account could provide new opportunities for tax-efficient savings for children’s futures.