Building Wealth for America’s Children: Trump Accounts Explained
Discover how the federal $1,000 investment program works, what the Dell family’s $6.25 billion commitment means, and how your family can participate in this savings initiative.
What Are Trump Accounts?
In July 2025, President Trump signed the One Big Beautiful Bill into law, establishing Trump Accounts as a tax-advantaged savings vehicle for American children. The program’s structure centers on a federal foundation: a one-time $1,000 pilot deposit made available to children born between January 1, 2025, and December 31, 2028, provided an election is made and an account is established through IRS Form 4547. This represents a direct federal investment in long-term wealth accumulation for the upcoming generation.
The investment mechanics are straightforward: families can contribute up to $5,000 annually to each eligible child’s account, with all deposits automatically invested in broad U.S. equity index funds compliant with SEC regulations. Investment fees are capped at 0.10% annually, and accounts remain locked until the child reaches age 18, at which point they convert to traditional Individual Retirement Accounts (IRAs) under standard IRS rules. Growth modeling by the Council of Economic Advisers (CEA) suggests that fully funded accounts following maximum contribution patterns could accumulate substantial balances—modeled scenarios range significantly depending on market returns, with high-return scenarios reaching approximately $1.9 million by age 28.
💰 Interactive Growth Projector
Model your child’s account trajectory using age, annual contributions, and market return assumptions
Projected Account Value at Age 18
Illustrative values using an 8% assumed return (for comparison purposes only — not official Treasury/CEA projections). Actual growth depends on market performance and contribution consistency.
The Dell Family’s Historic $6.25 Billion Gift
In December 2025, philanthropists Michael and Susan Dell announced a transformative $6.25 billion commitment to extend program access to families facing wealth-building barriers. This gift will provide an additional $250 to the first 25 million children age 10 and under living in ZIP codes with median household incomes below $150,000. The Dell contribution expands the program’s reach to include many children too old to receive the federal $1,000 seed (those born before 2025), directly addressing wealth disparity in households that historically faced obstacles to long-term investment.
The Dells’ commitment reflects a strategic decision to focus on economic opportunity acceleration for communities underserved by wealth-building infrastructure. By coupling with related coverage on the Big Beautiful Bill’s broader economic framework, this program represents a coordinated federal and private sector effort to democratize wealth creation. Combined with employer contributions through cafeteria plans and potential government entity commitments, the total funding available for participating children significantly exceeds the federal $1,000 baseline.
Program Overview: Core Parameters
Program Structure and Implementation Timeline
The Trump Accounts program rolls out across multiple phases from 2025 through 2026. Understanding each stage helps families prepare to maximize the program’s benefits. The first phase involves account election through Form 4547, with the second phase beginning Treasury’s activation process in May 2026. By July 4, 2026, the program officially opens for contributions, with the $1,000 federal seed deposited to activated accounts.
Account management remains straightforward throughout the investment period. Once activated, accounts automatically invest deposits in approved index funds, with no ongoing decisions required from parents beyond choosing their annual contribution level. Treasury or a designated financial agent holds accounts initially, though parents can later transfer to a preferred brokerage through a trustee-to-trustee rollover. This structure balances simplicity for families with access to professional fund management and low-cost index investing.
Six Implementation Stages
Parents or guardians file IRS Form 4547 to make an account election. The form can be filed with 2025 tax returns (due April 15, 2026) or through an online portal starting mid-2026.
Beginning in May 2026, Treasury or its agent will send activation information. Account holders complete an authentication process, after which the $1,000 federal deposit is transferred to eligible, elected accounts.
By law, all deposits must be invested in broad U.S. equity index funds (such as S&P 500 trackers). Leverage, individual stock selection, and complex derivatives are prohibited. Annual fees cannot exceed 0.10%.
Families begin making contributions to activated accounts. Annual contribution limits apply ($5,000 per child per year, with cost-of-living adjustments after 2027). Employer contributions through cafeteria plans are also permitted up to $2,500 per employee per child annually.
When the child reaches age 18, the Trump Account converts to a traditional IRA under standard IRS rules. The account holder gains control of the funds and can make distributions subject to IRA withdrawal regulations.
While accounts are initially held by Treasury’s designated financial agent, account holders may later transfer the full balance to a preferred brokerage firm through a trustee-to-trustee rollover, providing flexibility and choice.
Timeline: From Enactment to Access
The Dell Family’s Historic $6.25 Billion Commitment
Michael Dell (founder and CEO of Dell Technologies) and Susan Dell announced in December 2025 one of the largest direct philanthropic commitments to American families in recent history. The $6.25 billion gift reflects a strategic decision to focus on economic opportunity acceleration for households in communities historically underserved by wealth-building infrastructure.
The Dells’ commitment targets children age 10 and under living in ZIP codes with median household incomes below $150,000, providing $250 per child to the first 25 million qualifying beneficiaries. This approach directly extends Trump Accounts benefits to younger children—including many born before 2025 who are ineligible for the federal $1,000 seed—and prioritizes geographic areas where intergenerational wealth gaps are most pronounced.
Contribution Scenarios: Projected Values at Age 18
Illustrative values using an 8% assumed annual return (for comparison purposes). Official CEA/Treasury projections employ rolling historical S&P total-return scenarios (low/medium/high). This tool shows user-input assumptions; see government sources in Sources section for authoritative modeling.
Investment Rules and Program Eligibility
Trump Accounts operate under strict statutory investment guidelines designed to protect beneficiary interests and ensure broad market exposure. By law, deposits must be invested in index funds that track the overall U.S. stock market—typically S&P 500 or similar broad-based indices. Individual stock selection, use of borrowed money (leverage), and complex investment strategies are explicitly prohibited. These restrictions create a simple, low-cost investment structure accessible to families without investment expertise.
Eligibility requirements are straightforward. Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens with valid Social Security numbers, qualify for the $1,000 federal seed deposit when an account is established through Form 4547. The Dell family’s $250 supplemental contribution targets children age 10 and under (including those born before 2025) in ZIP codes with median household incomes below $150,000. There are no income caps for the federal deposit—all eligible children receive the same $1,000 contribution regardless of family wealth.
✓ Qualification Checklist
Frequently Asked Questions
Contributions officially open on July 4, 2026. However, parents can file IRS Form 4547 with their 2025 tax returns (due April 15, 2026) to establish accounts in advance. An online filing portal also becomes available mid-2026 for those who prefer electronic election.
No. Accounts remain locked until age 18 with limited exceptions: trustee-to-trustee rollovers to another Trump Account with a different brokerage, ABLE account rollovers in the year the child turns 17 (for children with disabilities), or distribution upon the beneficiary’s death. This lock-in structure protects long-term compounding.
At age 18, the Trump Account is generally treated like a traditional IRA under standard Internal Revenue Code rules. The account holder can withdraw funds for education, first home purchase, job training, or other purposes. Early withdrawals before age 59½ typically incur a 10% federal tax penalty unless a specific IRA exception applies.
The annual contribution limit is $5,000 per child per year (indexed for inflation after 2027). The one-time $1,000 federal pilot deposit does NOT count toward this annual limit. Qualified charitable organizations and government entities may make additional contributions for designated groups of beneficiaries without being subject to the per-child limit.
By law, accounts must invest in broad U.S. equity index funds or exchange-traded funds (ETFs) that track the overall U.S. stock market, such as S&P 500 index funds. Individual stock selection, use of leverage, and complex derivatives are prohibited. Investment fees are capped at 0.10% annually.
Accounts are initially created and held by the Treasury Department’s designated financial agent. At a later date, parents or guardians can transfer the full account balance to a preferred brokerage firm through a simple trustee-to-trustee rollover, providing flexibility in account management and choice of custodian.
Yes. Employers can offer pre-tax salary-reduction contributions to Trump Accounts owned by employees’ dependent children through employer-sponsored cafeteria plans (Section 125 plans). The first $2,500 contributed per employee per child per year is excluded from the employee’s taxable income. This mechanism allows employers to assist employees in building wealth for their children while obtaining a tax deduction.
Ready to Open a Trump Account?
Learn more about establishing an account, filing IRS Form 4547, and monitoring your child’s long-term growth at the official program site. For detailed regulatory guidance, visit TrumpAccounts.gov or review Treasury and IRS guidance.
Visit Official Program SiteProgram Summary: Trump Accounts Overview
The One Big Beautiful Bill (Public Law No. 119-21), signed July 4, 2025, established Trump Accounts as a tax-advantaged savings program providing a $1,000 federal foundation for every eligible child born between January 1, 2025, and December 31, 2028, upon account establishment and election. Families can contribute up to $5,000 annually, with all deposits automatically invested in broad U.S. equity index funds charged at no more than 0.10% in annual fees. The Dell family’s $6.25 billion supplemental commitment extends program access to 25 million children age 10 and under in ZIP codes with median household incomes below $150,000, providing an additional $250 per qualifying child.
Accounts remain locked until age 18, enabling long-term compound growth through market participation. At age 18, accounts convert to traditional IRAs under standard tax rules. The program opens for contributions July 4, 2026, following the May 2026 account activation period. Parents interested in participating should file Form 4547 with 2025 tax returns or use the online portal beginning mid-2026. Additional information, regulatory guidance, and account opening instructions are available through the official Trump Accounts website.
Primary Government Sources & Official Resources
- H.R.1 – One Big Beautiful Bill (Full Text) – Congress.gov
- White House: Landmark Dell Gift Announcement – Official Press Release
- Trump Accounts Official Program Site – TrumpAccounts.gov
- IRS Form 4547 & Instructions (Draft) – Account Election Form
- Treasury & IRS Guidance on Trump Accounts – IRS Newsroom
