Trump Accounts: What are they, do you need one? WA financial planner weighs in

Trump Accounts: What are they, do you need one? WA financial planner weighs in

One of the first commercials 130 million Americans saw as they tuned into the Superbowl this year was for an "Invest America" account, a local financial planner explains what they are.

SEATTLE - One of the first commercials 130 million Americans saw as they tuned into the Superbowl this year was for an "Invest America" account, also known as a "Trump Account," or a 530a.

It’s the latest tax advantage investment account option, but specifically for kids. 

Established by the so-called Big Beautiful Bill, if you have a dependent under the age of 18 you’ll be given a choice to open one when you file your taxes this year. 

Depending on how you lean politically, you might have a branding issue with them. A financial planner we talked to said he hopes families can look past that.

"Don’t wear your political hat, wear your financial hat," urged Saket Sengar, a certified financial planner with Better Financial Services LLC. "These are all your options. Take a look purely from an investment point. Is this a good thing? This is definitely a good thing," he said. 

The White House Council of Economic Advisors predicts kids who start saving with these accounts from their first year of life will start their 20s with anywhere from $20,000 to $270,000 in the bank. 

"In the investment world we call it the magic of compounding," said Sengar. 

Sengar understands for some families, figuring out how to save for their child’s future can be difficult. 

You may already have a 529 account set up for your child, which pays for college or vocational school, but the Trump Account works differently. Aside from education, when the account holder turns 18 they can also use Trump Account funds to buy a home, or open a business — penalty free.  If the money isn’t used, it becomes a traditional IRA. 

All U.S. children, under 18, with a social security number are eligible for an account.  The government will seed the accounts of kids born between January 1st, 2025 and December 31st, 2028 with $1,000 to jumpstart savings. 

Projections using S&P 500 averages show:

• If you don’t contribute anything to that $1,000 by the time your child turns 18, they’ll have $6,000 in the bank. If they leave it in and don’t touch it, by the time they’re 55 years old, they’ll have around $243,000. 
• The White House predicts if you invest $250 a year, by the time they turn 18 they’ll have $19,000 in the bank. If they don’t touch it, at 55 they’ll have $878,000. 
• Contributions max out at $5,000 a year. At that rate, by 18 they’d have $271,000. At 55, they’d have $13 million. 

The White House website on the accounts has a disclaimer, stating these estimates are for illustration only, and not guaranteed. 

When it comes to your choices, a 529 or a 530a/Trump Account, which is better?

"If you can afford it I recommend both," said Sengar. 

Aside from parents and children, grandparents, friends, even employers can contribute to the accounts. 

They’re set to activate on July 5. You can elect to open one using the new IRS form 4547. 

If you already filed your taxes for 2025 and opted out of the Trump Account, you’ll have to wait for more guidance on opening one from the White House. 

Also important to note: The $1,000 jump start for newborns is a pilot program through 2028. Once the Trump administration concludes, the accounts will remain, but it’s unclear if the government-sponsored seeding money will continue. 

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