Trump Accounts Webinar Transcript

Introduction to Trump Accounts

All right. Hello and welcome everybody to our webinar today, our lunch and learn. Today our topic is the Trump accounts.

Um, this was part of the big beautiful bill which passed in July of 2025.

And when they passed, it’s really a new concept, a new type of account.

And I mean I was telling you about it then but I told you just like a very, very basics and I said there’s like a million questions and we have absolutely no answers.

Um, since then just recently we’ve gotten some guidance and we have a little more direction and actually in the state of the union last night Trump was talking about these.

Um, the website has been updated even this week. So we have a lot more meat to discuss and explain so we can start to understand when are these, you know, Trump accounts going to be useful and what are they going to look like.

So joining me today is going to be Kevin Berg, senior manager here, and Tener Stowe from Boyum Wealth Architects and we are going to get through sort of a whole bunch of stuff.

What are these accounts? How do you open them? When can you open them? How do you get them funded? Are employers going to participate? And then look at some of the restrictions about the type of investments you can have, when do you get distributions, there’s a unique little gift tax consideration, but then at the end, we’re going to compare sort of what are some of these other options you might consider.

What are some of the other ways you can save? There’s definitely a unique Roth opportunity that we see in these Trump accounts.

Of course, there are still some unanswered questions. So, we will highlight what those are just so that you know sort of, I mean we have a lot of answers finally, but there’s still some unanswered things which you’ll need to keep an eye on before you sort of move forward with using one of these accounts.

Trump Account Basics

So, with that in mind, I think Kevin’s up first, talking about sort of the basics of what these accounts look like.

Thanks, Chris.

A Trump account is essentially an individual retirement account set up for a child under the age of 18.

The intent was kind of to get these kids a jump start on investing, learning about the importance of participating in the markets and allow them to do that before actually having some earned income.

As we were saying, you have to be a child under the age of 18.

You have to have a valid social security number.

So generally you’re going to be setting this up on behalf of your kids or your grandchildren. There’s some ordering rules, but generally it’s going to be the parents setting these accounts up.

Until the kids turn 18, you have an opportunity to fund it up to $5,000 a year.

And then once they turn 18, it becomes essentially a traditional IRA for them. So then they can have the opportunity to make contributions on their own behalf or roll it into other accounts or take distributions as they see fit.

How to Open a Trump Account

How do we go about opening them?

The primary way to open one of these accounts is going to be by filing Form 4547 with your 2025 income tax return or future years tax return if you’re not doing it initially.

You also have the opportunity to go out and complete this form on trumpaccounts.gov.

This website is live basically as of this week. So you can go out there, provide the information for yourself and for the beneficiary, your kid, and fill out your form and then you can submit it to the government.

Our initial impression is that it was likely a better route to go and wait to file the form with your tax return rather than submit it with the government. But we can provide updates on that as we’ll have more opportunity to see how these things get processed.

The thing is right now is there’s not a super rush to get the initial forms filed.

You can’t actually fund these until after July 4th, 2026, the one-year anniversary of the one big beautiful bill.

We think even though it’s not a complete rush, we do want to get these opened earlier in the year once they’re actually available. So, we’re not rushing about opening these right before year end.

And there’s worry about the account not being open by year end because you cannot fund these after year end like a normal IRA. You have to fund it by December 31st.

Funding Trump Accounts

Thank you Kevin. My name is Tener Stow with Boyum Wealth Architects.

And just a quick disclaimer, it’s for educational purposes only. It’s not investment recommendations, financial planning advice. And the opinions are of mine and may not reflect Boyum Wealth Architects’ broader opinions.

But first, how to fund one.

So, I think we’ve all heard about the thousand dollars from the government. So, that’s the main way that a lot of people get these funded.

If you have a child born between 2025 and 2028, you have to claim it. You have to open the account and claim it, but you’ll get $1,000 pilot funding from the government.

Beyond that, starting in 2026, this year, in 2027, you’ll be able to contribute $5,000 per kid.

That can come from parents, grandparents, other beneficiary, other individuals.

There’s a list. It can come from employer contributions, can actually come through employer salary reductions and even charitable organizations like the Dell Foundation where they contributed to allow even kids beyond the kids born in 2025 to 2028 to get funding in there.

But once you open the account, that’s when you’ll be able to get funded. It will not be able to be funded before July 4th, 2026, which I believe is a Saturday.

So, we’re really looking at July 6th as a starting point for really getting these funded.

But like Kevin said, it does have to be before the end of the year. We do not have until mid-April of next year to fund them for 2026.

That’s one of the big things to remember.

Employer Contributions

When it comes to the employer contributions, the employer can contribute up to $2,500 as part of a formal employee benefit.

But then that would only go to employees that do have a qualifying child that have a Trump account open.

So, a kid zero through 17 essentially.

Other employees would get zero. So, it’ll be interesting to see if employers actually pick up on this or if it is something they even want to do.

And then another way that employers can kind of help at least, or facilitate this, is they can set up a salary deferral program for employees.

Where you could actually do, from the looks of it, tax deferred money into the Trump account and then get a tax deduction for this year.

We’ll see how that actually gets worked out and if employers actually set that up and then how that would affect other benefits down the road with tracking basis and things like that.

For my money, I think the salary deferral thing is going to be way more common than the $2,500.

Because we’ve got some great people here that don’t have kids or their kids are 25 years old. Are we really going to choose to give $2,500 to the people with just having kids now versus the people who have a 20-year-old kid?

I think some companies might do that, but I think that salary deferral program could look a lot more like a pre-tax daycare program where the company is facilitating it. They have the program, but it’s not costing the employer any money.

So, I think that could be a lot more common in practice, but we’ll have to see.

Investment Rules

So then once you actually get the money contributed, what can they be invested in?

So we’re still trying to learn exactly what this looks like, but the general idea is it’s going to be a low-cost index fund tracking a broad-based U.S. stock index.

Right now that could be looking like a VOO or an SPY, which are S&P 500 index funds, or something like VTI, which is a broader total U.S. stock market fund.

So, it’ll be interesting to see what they actually come out with if they use current ETFs or mutual funds that are on the market or if they create new ones.

One thing that we’ll touch on a little bit is that eventually it looks like these accounts will be able to be held at different custodians like a Schwab, a Vanguard, or a Fidelity.

So, we don’t know yet if they’re all going to have to use the same investment or if they’ll set up their own Trump version or one that qualifies for the guidelines.

A couple things with it, there cannot be any leverage funds. The annual fees have to be capped at 0.1%.

And then you can see the list of things it’s not going to invest in like crypto, international, individual stocks. It’s not going to be left as cash money market. It’s not going to be in treasuries, annuities, commodities.

It’s really designed specifically to go into a, whether it’s an ETF or mutual fund, index fund specifically for just U.S. stock investments.

Distribution Rules

And then lastly on when can they get distributed?

So this is where it’s very strict.

There are no withdrawals during what they call the growth period. So before the kid turns 18, there are no withdrawals allowed except in the case of a death or mainly going to a qualified ABLE account rollover when they’re 17.

You can transfer between custodians once we learn more about what that looks like.

But you cannot take money out of the accounts before the child turns 18.

And then once the child turns 18, that’s where it acts very similar to an IRA account.

So after 18, if they do take out the basis, the contributions that were not tax-deductible, that would be tax-free.

Any earnings or growth on it would come out as ordinary income plus a 10% penalty similar to the IRA rules currently.

There are some exceptions that are related to current IRA rule exceptions, which would be for higher education expenses and first-time home buyer expenses.

You would still pay taxes on the growth, but you would not pay the 10% penalty as long as you were under those exceptions.

And then once you’re 59 and a half, there would be no penalty for withdrawals. It would be taxable. It would be income tax on the growth.

Gift Tax Considerations

So, one of the somewhat unanswered questions is about the gift tax.

The question is, do you need to file a gift tax return for contributions that you make, as the parent, into the Trump account?

And the real question there is are the contributions considered a present interest gift?

Our view is that generally yes, they should be.

Our view is that generally yes, the annual exclusion should apply to these contributions.

And as a result, we will not file a 709 gift tax return unless some contrary guidance comes out.

Right now, I think there’s a little bit of guidance which could clarify this from the IRS.

The IRS could put out an announcement and be like, “Yes, we agree that these Trump account contributions are eligible for the annual exclusion.”

And so when you put five grand in the account, you do not have to file a gift tax return for that.

I think that would ease a lot of minds.

It’s very similar to 529 plan contributions. And that is how the rules apply to 529 plan contributions where the annual exclusion takes care of it.

You do not need to file a gift tax return.

So, I would say if you are in a position where you’ve made taxable gifts and you’ve used up your entire exemption, maybe this is a slightly different conversation.

But I think some guidance could come along and just make this issue go away entirely.

Comparing Trump Accounts, 529 Plans, and Roth IRAs

So, we wanted to compare a few of these different accounts.

We’ve got the Trump accounts, we’ve got the 529 plans, and we’ve got Roth IRA.

The contribution rules are different for each of these.

The Trump account, you’re going to get that $1,000 free potentially if you have a child born during that time.

And then there’s a $5,000 annual limit on contributions, but it doesn’t matter what your income is.

529 plan, we’ve got this $19,000 annual exclusion. You can contribute that much and not have to file a gift tax return.

Again, this has nothing to do with income.

And then the Roth IRA, it’s $7,500, but it’s limited to your earned income.

So, I have got a three- and one-year-old at home. They do not make any money.

They cannot contribute to a Roth IRA, but I could put five grand in a Trump account for them this year.

And I could put $19,000 in a 529 plan if I wanted.

But my kids do not have Roth IRAs today because they don’t have any earnings.

Certainly when they are in high school and they’re getting older and they’re working summer jobs or whatever, they might have some earnings.

So if you have $4,200 of wages for the year, then you can contribute $4,200 to the Roth IRA.

The withdrawal rules are going to be somewhat similar and a little bit different on these.

So the Trump account, as Tener was saying, zero distributions before they are age 18.

After that, very similar to traditional IRA rules.

529 plans can be used for K-12 education costs, higher education costs, professional accreditation costs. So that has a very wide scope.

Roth IRAs, those distributions come out basis first. They’re available at any time.

The taxability basis is going to be free in all of these situations.

In the Trump account, the earnings are going to be ordinary income plus 10% penalty unless an exception applies.

529 plan, the same thing. The earnings are ordinary plus a 10% penalty unless the exception applies.

The exception is going to be education costs for the 529 plan.

Similar for the Roth IRA, the earnings are going to be ordinary plus the 10% penalty unless an exception applies.

Savings Priorities and Considerations

So there’s these other considerations to keep in mind.

The restrictive investment rules for Trump accounts, that doesn’t exist for these other types of accounts.

I think the tracking of contributions, the source of the contributions, that is very important for these Trump accounts in a way that it isn’t for these other ones.

A Trump account might have contributions from three or four different sources. You’re going to have to track all that separately.

A 529 plan tracks your basis for you. It’s very easy.

Roth IRA, there’s only basis coming from one thing. You should track your basis, but it’s only one bucket.

It’s a lot simpler.

Charitable contributions, they can make contributions to Trump accounts. That’s a little bit unusual.

529 plans, you can modify the beneficiaries.

And then the Roth IRA, the key thing there is you’ve got to have earned income in order to make contributions.

So that’s unique.

But then the potential for these backdoor Roth contributions later in life I think is tremendously useful to consider.

So there’s a lot of different ways you can save, right?

And so I’m working. I’m a parent. I’ve got kids. I’m thinking about saving for myself, saving for the kids.

This is kind of the order.

Every situation’s a little bit different, obviously, but I think this is a pretty good order that you would consider doing them.

You’re going to have your own retirement accounts. You really want to get the employer match on that. That’s free money. Free money is the best kind of money.

But using those retirement accounts for your own deferrals.

You can have retirement accounts outside of that. So that’d be like your personal IRA or Roth IRA.

Health savings accounts.

If you have a high deductible health insurance plan, that can be a great way to save money.

You could save money in a taxable brokerage account.

You could set aside money in a 529 plan for the kids.

You could have UTMA accounts for the children.

You could have ABLE accounts if you have kids that would benefit from that.

Now, we’ve got the Trump account sort of thrown in there.

You could have a trust for the benefit of the child, irrevocable.

There’s lots of different variations of trust that you can set up, but I think sort of the best comparison for these Trump accounts is more of an irrevocable trust where the beneficiary has full rights to all of the money at age 18.

The money is totally locked up until they get to 18.

And that is a very unique feature of the Trump accounts.

Unique in a bad way.

All of these other ones, you can get the money back out if something happens or there’s hardship withdrawals.

In these Trump accounts, it really is locked up and you’re not getting it out of there unless the child dies or you roll it into an ABLE account.

That’s really locked up in a way that doesn’t apply to any of these other things.

The Roth Conversion Opportunity

Kevin, I think if you are going to proceed, some of these Roth opportunities are some of the unique perks of the Trump account.

And if you’ve sort of gotten past all of the thought process and now you’re at like, yeah, I am going to fund this thing, then I think this Roth opportunity is a pretty cool one.

So let’s walk through that.

Absolutely, Chris.

As you’re saying, it’s not the best tool for saving for education. It’s not the best tool necessarily to give them opportunity to buy a house, but this is a fantastic opportunity to supercharge a Roth account for your kids much in the future retirement.

Up until the age of 18, the child is eligible both for the Trump account contribution of $5,000 a year and if they’re working and they earn at least $7,500, they can fully fund a Roth IRA for the year.

So, $5,000 a year up till the kid starts working, $12,500 up until they’re 18 and working.

And then once the child turns 18, the Trump account becomes eligible to be rolled into a Roth IRA.

And at that point, you have a Roth IRA that can grow up until the child’s retirement age of 59 and a half, 65, whatever it happens to be.

Example: Age 10 Child

Have a kid that’s age 10. For the next eight years, we’re going to put in $5,000 a year.

So, we contribute a total of $40,000.

This will grow up to $58,000 roughly at the time the child turns 18 and is eligible to roll into a Roth IRA.

We will convert it in a taxable conversion, pay tax on $18,000, but because of standard deductions, we’re likely going to pay roughly zero tax on this.

So now we have a $58,000 Roth account that is going to grow for the rest of the kid’s working career, and we’re going to have a fairly wealthy 60-year-old, $1.5 million that’s totally tax-free in the future.

Example: Newborn Child

We can have even larger opportunities if we’re starting with a kid who’s just born this year.

This is the kid that’s really getting that opportunity to participate in the markets that Trump was talking about last night.

We get them started up at age one.

They get their $5,000 a year contribution up until the age of 17.

They get the $1,000 free dollars from the government.

By the time they turn 18, we’re going to have roughly $185,000.

This is the part where we have, this is required a little bit of planning as well because we’re going to actually have a tax liability when we convert this at the age of 18.

We’re going to have roughly $100,000 of growth, which could be $14,000 of taxes.

So, that’s actual additional cash out of pocket that we’re going to need to have available at the time this child turns 18.

But once we do that, we have got a very healthy retirement balance at $185,000 at the age of 18, which could set them up to have potentially $10 million.

The trumpaccounts.gov website likes to show his $13 million, but this can put them in a really good spot for a healthy retirement by getting them started early.

And that’s really what they’re trying to encourage, is showing the long-term opportunities of investing.

So, this is where we see the real opportunity.

Outstanding Questions

So there’s a few outstanding questions.

I think one of them, a key one, is sort of when will these accounts be transferable to your preferred brokerage, right? Or when can you set them up directly?

So, it is not super attractive, the idea that I’m going to go set this up with the Department of Treasury and now I got a separate login and I got to keep track of this account that’s living at the Department of Treasury.

I have all of my accounts at Schwab.

I just want one more account at Schwab.

We don’t speak for Schwab. I think Schwab is going to offer these.

Is it going to be on July 4th or July 6th or September 1st?

At what point is Schwab going to have the ability to open these accounts themselves because that will cut out the Department of Treasury being the middleman and I think that will be far preferred?

So, we don’t have the answer to that.

As Tener was talking about some of these restrictions on qualified investments, what does that look like specifically?

Is there going to be a special Trump ETF ticker that’s the U.S. stock market or are they going to just use these existing ones?

So, I think there’s some questions there.

Cash is not one of the allowable investments.

You literally cannot put in $5,000 and just let this sit in a money market account.

So, how is that going to be facilitated by Schwab and Vanguard and Fidelity?

Are they going to auto enroll you into one of these qualifying ETFs?

Are they going to automatically then reinvest the dividends?

At what point is having cash in the account breaking the rules and then what is the consequence for breaking the rules if you even do break the rules? I’m not sure.

I’m hopeful we will get a little clarification on the gift tax thing.

I think our approach is a very reasonable approach.

I’m optimistic we’ll get an answer before the funding actually starts to happen.

You know, these are called Trump accounts.

What happens when he’s not the president anymore? I don’t know.

Are they going to be modified in some way?

Are they just going to try and fold them up and just put them into an IRA?

I’m not sure what happens whether there’s a Republican or a Democrat president next.

Can you really see the next president having a thing called a Trump account? I don’t know.

And I’m not sure what we will see going forward with these charitable contributions getting involved.

Charitable organizations can contribute to these like the Dell Foundation is contributing and they set their own rules around, you know, you got to be kind of medium or low income.

But you could see charitable organizations making contributions for their local community.

I think it’ll be interesting to see how much of that money exists because that can go towards your $5,000 funding.

Personal Perspectives

So, I’ll put Kevin on the spot. He’s got kids. Kevin, are you going to set one of these up for your kids?

Chris, that’s actually a great question.

I’m really relying on the goal of this account for my kids is going to get that money into a Roth IRA.

I have two children. I have a 15-year-old who is planning about getting a part-time job. And I was thinking, if she gets this job, I’m going to fund her Roth IRA.

I would cut the Trump account out as the middleman for that daughter.

But if I want to be fair to my youngest daughter who’s nine, she can’t start working yet.

So if I was going to make a contribution to my oldest daughter’s Roth IRA, I would open a Trump account to do a matching contribution and then at age 18 plan on converting that.

Interesting.

I’ve got like an 18-month-old and an almost four-year-old at home and I’ve thought about this a fair amount for the last seven, eight months.

I think I’ve gone through the other accounts and I have a pretty good handle on the other savings and like we have 529 plans.

I think a 529 plan is far superior in my own situation.

So, I think I have enough funding in there that I am considering and I think I probably will fund one of these for both of my kids.

With a caveat.

I would say I am not in a rush to do this.

It’s only February today.

I think I would say I’m like 90% going to do this for my kids.

But I’m not going to do it until I can set it up directly with the brokerage, right?

I do not want a Department of Treasury account.

And if it takes until November for the brokerages to sort of allow for this, I’m waiting until November.

I don’t want to wait until December 30th and try and get all this done in 48 hours before the end of the calendar year, but I’m definitely not going to be the first person to set up a Trump account at my brokerage.

I do not want to be doing this in July.

New programs roll out, there’s going to be kinks, there’s going to be a mess getting these things set up. It’s going to be a nightmare probably in July.

Let other people go first.

I will not be the first to the party.

But I think I probably will get there before the end of the year.

And for me that’s because I feel pretty good about the balances I’ve already got in the 529 plan.

And so I think I can afford to have this money locked up absolutely in a black box until they turn 18.

That’s a long time from now.

And it’s the leap that I think I’m willing to make.

But ask me again the day before I fund it.

I reserve the right to change my mind.

Final Thoughts

Tener, do you have a final thought or what’s your takeaway for the presentation today?

Yeah, I think they’re definitely interesting.

And like Chris, you just said, if you have some of the other boxes checked, it could make sense as another funding option for your kids.

So, I think really going back and looking at your own financial order of operations of do you have everything else taken care of first?

Do you check the box on not needing the money?

Do you check the box on your own retirement savings?

If you got those things figured out, this could be a good option.

And it also doesn’t mean that because you started today, you have to fund it for the next 17 years.

If you have a one-year-old, yes, it’s a final decision and if you put $1,000 in, you’re not getting that back, but it’s not a decision that now we have to continue to always fund it.

So, I think you do have flexibility there with the funding.

You don’t have to continue if you set it up and decide to make other decisions.

And it’ll be interesting to see as we roll out to different custodians, see how it’s implemented, to see what the investment decisions are, if any new tax information comes out, and to really see how they’re utilized.

And back to your point, Chris, on if they last for the next couple decades or if something changes in a few years and they kind of fade away. I think that’ll be really interesting to watch.

Final thoughts from Kevin.

I agree.

I really am excited for the Roth opportunity.

I think that’s the whole point of this presentation was to point where this is the ideal tool for.

And I think that is it’s for setting up kids for a solid retirement future.

It isn’t the primary tool for funding education.

It’s not the primary tool for transferring money, help them buy a house, but if you want to help them set up for a very secure retirement, this is a great tool.

Yeah.

I think I would wrap up and conclude and say if you are going to make a contribution to a Trump account for your kids, grandkids, whatever, I think you first need to have a full and complete financial plan put together for your life.

You have got to be willing to understand the unique risks of this where the money is just not available at all.

And I think if you have the full complete financial picture together, you have your full financial plan put together, then it can make a lot of sense with the Roth conversion piece.

Without the Roth conversion piece, honestly, I don’t think I’d be doing it.

That is definitely the most attractive part of the whole thing.

So, if you have the full financial plan put together and you are confident that you can lock up this money until the child turns 18 and then you’re willing to convert it and turn it over to the kid in a Roth IRA format at age 18, then I think it makes some sense.

And if not, I would be very cautious and do your financial planning first, right?

Talk to Tener, figure out what your whole financial plan is.

That seems like the priority and this is one of the tools you might use to do that.

So, I do not see any questions in the Q&A.

So, with that, we will call it a day.

As more guidance comes out, feel free to reach out to any of us.

Happy to talk about it.

But, thanks for tuning in, guys.