In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss Trump Accounts with Taylor Wolverton, our Director of Financial Planning and Tax Strategy, breaking down exactly how do Trump Accounts work, who qualifies, and why this new option for Trump Investments is quickly becoming part of the conversation around saving for children and investing for grandchildren. Retirement planning has always started with the accounts you already know, but these works differently, and if you’re building a family financial planning strategy or looking for financial gifts for grandchildren, it’s worth understanding before you decide whether it belongs in your plan. 

Listen in to learn about the eligibility rules, the contribution limits, and the one-time $1,000 government deposit that applies to certain children. Radon and Murs also walk through a Roth conversion strategy hiding inside these accounts, one that turns a simple child investment plan into a genuine tool for building generational wealth. Whether you’re deep into your own retirement tax planning or just starting to think about a retirement checklist for your family, this episode connects a brand-new account to the same retirement tax strategies you may already be using in your own retirement financial plan. 

In this episode, find out: 

• What a Trump Account is, who’s eligible, and how the application process actually works 

• The contribution rules, including the $5,000 annual limit and the one-time $1,000 seed deposit for eligible children 

• How employer contributions work and why they don’t add to your taxable income 

• The Roth conversion strategy that can turn contributions into a tax-free retirement account for your child 

• When money can be withdrawn, and the penalties to know about before that age 

Tweetable Quotes: 

“There’s zero money to us in setting up a Trump account. We just wanted to talk it through, because there are real benefits people can take advantage of.” – Radon Stancil 

“There’s not many ways you can get a thousand dollars tax-free. If someone was born between 2025 and 2028, it seems like a no-brainer.” – Murs Tariq 

Resources: If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement! To access the course, simply visit POMWealth.net/podcast. 

Here’s the full transcript:

So, we’ve been talking about Trump accounts and the question kind of has been coming up as we’ve 

been talking to clients about how these things work. And there’s been a lot of questions around it. 

And so, I appreciate your feedback on this, Taylor. So, we appreciate you coming on and chatting with 

us today on the podcast. But, you know, one of the things that, 

you know, I just wanted to say, because we were talking about it is, you know, sometimes I think 

people think, oh, man, these, you know, we’re hearing these things called Trump accounts, and they 

are labeled that. And there’s some benefits to them. And there’s some things that people have 

questions about. So, I just wanted to kind of have us chat about how these things work. But I also 

want people to know that if you’re listening to this podcast, for us to set up a Trump account and 

for us to do this for somebody, there’s zero money to us in that. I mean, 

we don’t make money opening these up, but there are some benefits that people can take advantage 

of. And we just wanted to talk about it through. And I know that, Taylor, you were saying that you are kind 

of looking at a lot of different aspects. And because here’s some of the questions I think 

people have. Like, first of all, what is a Trump account? Who qualifies for it? How do you open 

them? What does that look like? And then what are the contribution rules? How are you eligible? 

Then how do you get money back out? How does that work? And then I think a big one that you 

were even talking about, Taylor, when we were talking earlier, people are confused, well, 

should I do this instead of a 529? Or should I do this instead of brokerage? Or should I do this 

instead of a Roth? Or like, what are my options around that? So, I just thought it would be nice for 

us to kind of have a conversation around those topics. So, thinking, I know, Merce, you’re here too. 

So if anybody’s listening, so. Yeah, I agree. You know, they’ve been talked about for a while, but 

then there’s more information now. So, Taylor, let’s just go ahead and kind of dive in and 

understand what a Trump account from the basics is. Right. 

Yeah. So, this is new. It was introduced as part of the One Big Beautiful Bill Act, 

which was signed into law almost a year ago, July 4th, 2025. 

And it was initially introduced as part of that law, but they kind of said we won’t actually 

implement this until July 4th, 2026. So as of the time that we’re recording this podcast. 

The ability to actually open this account and fund the account is a brand-new thing, 

but really the intention behind this account overall is to give kids the opportunity to start 

saving and investing for the long term. Well, good. But I think that you just said kids, 

so, it’s going to take us right to the… like, so when you say, 

who is this for? And, you know, what are the, you know, I guess the age requirements and all that 

kind of stuff? Yeah. So, to open this account, this is for children under the age of 18. 

And a parent or guardian will administer the account initially until the child that this account is 

for turns 18, at which point they will take over the ownership of the account. 

So, to be eligible, like I said, has to be for a child under the age of 18. They have to also be a U 

.S. citizen and they have to have a social security number. So fairly simple, 

but yes, it is absolutely geared towards children. Okay. So, let’s say that I’ve got a child or a 

grandchild and I want to open this up. How do you go about doing that? Yeah, 

so, the ability to open the account has been around for a few months now. 

did have the opportunity when filing your 2025 tax return if you were claiming your children as 

dependents. As part of that, there was an IRS form that could go along with your 2025 tax return, 

or you could fill out that form as a standalone as well. But now there is also a website. 

The URL of the website is trumpaccounts.gov. It will take you to a website where you can download 

an app to also open the account now. So, the app may be the easier way to go about it. 

But it was possible to do it with your 2025 tax return. So, if you did that option, you may have 

already gone through the process and filling out the information needed. Yeah, I have heard that 

the app is pretty smooth. And in the app world that we are in today, most people tend to want to go 

that way versus an IRS form. And it seems like it should be pretty straightforward, 

maybe a 10-minute opening process. Yeah, it’s quick. So, with all these different accounts that 

people are used to, and we got IRAs, 529 plans. You’ve got Roth IRAs. 

We’re all used to the fact that when we’re doing that, there’s rules about how much you can 

actually fund. And so, I guess before we get into the advantages or anything like that of this 

account, what are the funding rules? What does a person have to know? How much can they put in? 

Yeah, there are contribution limits. So right now, that limit is $5,000 per year for each account. 

And the $5,000 is supposed to go up annually starting in 2027. So, if you’re listening to this 

after 2026, then the contribution limit may be different for future years. But one thing that is 

really unique about these accounts and that is being talked about a lot is that for children who 

were born between January 1st of 2025 and in the future, 

December 31st, 2028, those children when opening these accounts will receive a one-time 

contribution of $1,000 from the U.S. Treasury. So, any child under the age of 18 can open these 

accounts, but for those specifically born between 2025 and 2028, they get that free thousand dollar 

contribution. It’s tax free. There are no income restrictions or limitations on that. 

Anyone in those years, that’s really the only requirement. They get a thousand dollars to start 

off. So, it’s just like promoting childbirth. Yeah, in a way. I mean, it seems like a no brainer. 

There are not many ways that you can get a thousand dollars tax free. So, if someone was born between 

25 and 28, it seems like a no brainer. Yeah, for sure. 

For those children, just get the account open, get the $1,000. Whether you contribute beyond that 

or not, it’s a different conversation. But yeah, I agree. Might as well just start off with $1 

,000. That $1,000 also, to be clear, does not count towards the $5,000 contribution limit. 

So, if you still want to add another $5,000 on top of that, you can go ahead and do that. 

That is a possibility there. There are also opportunities for other institutions like charities or 

even state governments. Governments are eligible to make contributions. If that is something that 

comes up for your child or grandchild, that does not count towards the $5,000 a year limitation. 

And there are also employers, some companies that have already announced that they are also going 

to make contributions towards Trump accounts. Employers are limited to $2,500 a year in 

contributions. And that also does not. count against the 5,000, or I’m sorry, 

that does count against the $5,000 a year limit. But fortunately, 

that will not be included in the employee’s taxable income. 

So, say, for example, your employer says, I’ll put $2,500 into your kid’s Trump account, 

get the $2,500. Now your contributions are limited to the other. 

$2,500 as part of that $5,000 limitation, but you don’t have to pay tax on that $2,500 or 

anything like that. So, kind of, again, just like free money in a way from your employer. So just to 

clarify on that point, it’s not something I could do as an employee, like a payroll deduction, 

like I do with my 401k, right? Correct. Yes. It has to come directly from your employer. 

Yeah, like I said, there’s just like multiple companies that are announcing that this is something 

that they’re going to participate in. Not every single employer is participating in this. So, you 

would have to find out from your particular employer if that’s something that they’re doing or not. 

And then the last source I kind of alluded to already, but just from any other contributions, it 

could be the grandparents, the parents, the friends, the neighbors, the aunts and uncles, whoever 

else wants to add to that account. Again, contributions from all of those sources are limited to 

the $5,000 a year. And there really are no tax benefits or anything from those contributing. 

But yeah, it just adds to that child’s account balance over time. 

Okay, very good. And so… we set up the account, we get the free thousand dollars and we’re doing 

the five thousand a year. And I don’t know, let’s just say the kid now is 18 and thinking about 

college and there’s fifty thousand dollars, whatever number there’s fifty thousand dollars in the 

account. How can we start actually utilizing this type of account? Yeah. So right now, 

well, that kind of makes me think, too. One other thing I should say right now is that the 

investments. The way that this account can be invested has to be invested in a U.S. 

equity index fund. So, it’s not like, you know, you open a brokerage account at Schwab and you have 

access to the entire stock market. It could be whatever you want. It could be bonds, could be 

international funds, whatever. These Trump accounts are restricted to U.S. 

equity index funds. That’s one thing to be aware of. But yeah, over time, as you’re contributing to 

this account and as it’s invested, the account balance is growing. So once the child reaches 18, 

that’s the first opportunity you have to start distributions. There is no way to get money out of 

this account is prior to each 18. So don’t go in with the expectation that you’re going to get the 

thousand dollar contribution from the government and just. use that right away to buy diapers or 

whatever it is. You can’t get it out until they are 18. So, know that going in, 

same as the annual contributions, you’re going to wait till 18. But at that point in time, 

it’s kind of really similar to traditional IRA rules. 

So for one thing, you can leave it for retirement. Like a traditional IRA, 

you cannot take distributions until you’re 59 and a half. So that also applies to Trump accounts. 

But there are some exceptions that you can take distributions prior to 59 and a half for things 

like a first-time home purchase. True for a Trump account, also true for a traditional IRA. 

You can take distributions for education or for disability or for health insurance if you’re 

unemployed. Things like that. All the same rules apply to traditional IRAs. 

They also apply to Trump accounts. If you take distributions for anything else between 18 and 59 

and a half, you will pay a penalty. So be aware of those restrictions on distributions. 

And then as far as taxes go, it’s a little bit unclear still exactly how this is going to be 

handled and treated. But it does seem right now like the earnings inside of the account will be 

taxable as ordinary income and the contributions to the account will be. 

tax-free as kind of like a return of those contributions. So, there’ll be probably a little bit of 

like a funky calculation that has to go on when we’re taking distributions. But I would say for the 

most part, just expect ordinary income taxation on those distributions too. Now, didn’t I, 

I thought I read on these that Let’s just say that I had a kid for five years, 

I put money in. So, $25,000, I maxed it out. I got $25,000. And let’s say that the account has 

grown by five. So, I’ve now got a $5,000 gain. So that’s tax deferred that I could convert this to 

a Roth. And so now I’ve just taken it, now I have $30,000 in my… 

account that’s all Roth likes. Now it’s all growing tax free for my, for my, my child. 

Yes. Yeah. And I only pay taxes on that 5,000. Correct. You know? Yeah. So, I think that, 

that is, you know, I didn’t know too much about Trump accounts up until. us talking about this so 

thanks for doing a lot of the research here Taylor but you know just a glaring difference and i 

think what we’re going to do because there’s enough meat here and i know a lot of people have 

questions as they are bringing in uh kids or they have grandkids that they want to help set up 

for education and then there’s a conversation of the 529s like you said at the beginning versus 

now trump accounts versus brokerage accounts or just you know saving money into a bank account But 

something that just jumped out to me is, you know, to be able to fund a retirement account for a 

child right now is a little bit difficult in the sense of the child technically has to have some 

element of earned income to be able to fund an IRA or a Roth account. And I mean, what one year old 

is going to have? earned income unless you own a business and can somehow finagle that. So, this 

kind of opens the door for what everyone is looking for, which is setting up an element of building 

wealth from an early, early time. And then you can teach them, too, about the stock market. So, I 

think just learning and hearing from you about it, I think there are things that need to be 

understood, but it seems pretty enticing to be thinking about as part of a kid’s wealth building 

plan. Just on that topic, I mean, when the child converts and now, they’re an adult, 

they’re really converting it to their tax bracket, not the parent’s tax bracket. So, I could have a 

child who’s, let’s call them $10,000, $20,000, maybe even $30,000, and they’re going to be able 

to convert that into a Roth and pay very little, if any, tax on it. Yeah, ideally when you’re 18, 

you’re in the lowest tax bracket, maybe in your life. Right. 

You don’t have a lot of earned income probably at that point in time. So yeah, 

the opportunity is definitely there. And I agree too, maybe it’d be another episode we can kind of 

go into the actual application of how to decide which one to, which type of account to have, 

which to contribute to, because it does depend on the goal. But yes, that is a unique with this 

type of a Trump account. All other retirement accounts, your traditional IRA, your Roth IRA. The 

owner of the account, even if it’s a child, has to have earned income. But that’s not true with the 

Trump account exactly. So it is that longer-term retirement beginning for a child. 

If they want to convert that to a Roth IRA to make that even better for them over the long term, 

then yeah, that’s another thing to definitely be thinking about and planning for, for sure. I used 

to joke with parents when we, we used to have a thing where you could do a stretch IRA. And I said, 

it’s the best way for you to make sure that your children remember you because they’re going to get 

a check for the rest of their life, you know, in that stretch IRA. And I, you know, like it or not 

like it. Trump’s kind of figured out a way to make sure that you remember him, even after he’s 

gone, because your kids are going to have Trump accounts way into the future, way after he’s not 

here anymore. 

Like it or not, these accounts are here. They are called Trump accounts. And you could be happy 

with that, not happy with that, but there are benefits to that. And so anyway, sorry, Merce, 

I just thought that was funny. I just had one follow-up question, Taylor. I don’t know if you came 

across this in your research. The contribution, is it a calendar year contribution or does it work 

kind of like IRAs where you can wait till your tax filing? Do you know? That’s a fair question. 

I don’t know. And the things that I’ve read have not been specified. Like I said, 

too, this is kind of like, okay, here’s the idea. The implementation is not going to happen until a 

year later and kind of following. We see that with a lot of laws that Secure Act was the same way 

Secure Act 2.0. They said here’s what we’re planning to do. We’re not actually going to implement 

it was until a few years later when we have a kind of all the details sorted out. So maybe that’s some 

more information that we get, I would assume. just to be safe that it’s a calendar year, but yeah, 

I’m not sure. So, you know what I’m thinking, because I know we’ve talked about this because we 

wanted to get this information out. Kind of what I’m thinking, instead of us trying to take and 

overwhelm people about this, I think what we could do is we could do a follow-up conversation on 

this right after this episode, where basically what we’ll do is let’s just talk through some real 

scenarios of, hey, I got a person and do, you know, what is the advantage or disadvantage of doing 

a 529 or doing a Roth? Or, you know, like if I had that ability, 

like Murs said, I’d have to earn income. But like, what would be the better way to go here? 

Is it better for me to do this or that? And then the pros and cons. And I think we could just walk 

through that with everybody. And we’ll just have one episode of us just kind of having that 

conversation versus us trying to segue into that now, if you guys are OK with that. Yeah, I agree. 

All right. Well, thank you very much, Taylor, for hopping on with us. This gets us started on this 

conversation. So, I do like to always remind people, if you’re listening to this and you just really 

want your specific scenario figured out, feel free to go on our website, pomwealth.net, 

go to the Contact Us page, or you don’t have to go there anymore. We actually got it set up there 

on the homepage. You can just go schedule a call. It takes you right to our calendar and you can 

get on a call with us. We would be glad to just kind of walk you through your very specific 

situation. Thank you very much, Taylor and Merce and all of us just to be able to have a nice 

conversation around this. We hope everybody enjoyed the episode. We’ll talk to you again here on 

the next one.