Trump Accounts are Law. Now What Comes Next Matters Most.

Trump Accounts (also known as “530A Accounts,” or “530As”), could represent one of the most significant federal investments in child asset-building in decades. The idea is powerful: give every child an early stake in the economy, harness the power of compounding, and normalize long-term saving and investing from birth.

But policy design matters. Without careful attention to account opening processes, contribution structures, tax treatment, and administration, Trump Accounts risk reinforcing rather than narrowing existing wealth gaps.

The opportunity before policymakers, regulators, philanthropies, and financial institutions is straightforward but urgent: Let’s design Trump Accounts in a way that makes them work for the low-income families who need them most.

Even as stakeholders work to make the most of this policy, we cannot, however, pretend that it exists in a vacuum. The reconciliation package that established Trump Accounts also imposed new work requirements on Medicaid and SNAP and reduced access to student loans, to name a few provisions that stand to negatively impact low-income households.

But now that Trump Accounts are law, it is up to us whether we allow them to become a modest, uneven tax shelter for families already positioned to save or instead shape them into a meaningful on-ramp to financial security for the next generation.

History suggests improvement is possible. We have seen imperfect policies evolve into more effective tools over time. Trump Accounts should be viewed the same way—as a policy that will require iterative improvement and refinement over time. With thoughtful design and sustained political will, Trump Accounts could evolve into something far more powerful than their origins suggest: a universal, inclusive foundation for the next generation’s financial security.

What Are Trump Accounts?

Trump Accounts are a new federal early wealth building policy created under the 2025 reconciliation legislation, formally titled the One Big Beautiful Bill Act. Parents can begin contributing in July 2026, though families with eligible children can opt in to opening an account through the tax filing process now.

Under current law:

• Every U.S. citizen under the age 18, starting January 1, 2025, is eligible for a Trump Account.
• The federal government will seed each account with $1,000 at birth for every U.S. citizen born between January 1, 2025 and before January 1, 2029.
• Accounts are established as tax-advantaged retirement accounts under the Internal Revenue Code, structured similarly to IRAs.
• Employers and family members may contribute up to $5,000 per year (indexed for inflation) until the child turns 18.
• The total projected federal cost is approximately $15 billion.

Once the account holder reaches age 18, funds may be used for any purpose. However, as with retirement accounts, early withdrawals before age 59½ are subject to penalties, with limited exceptions (including first-time home purchases, education, certain medical expenses, and disaster recovery).

On paper, Trump Accounts offer meaningful benefits. They introduce market exposure and compound growth early in life. They normalize saving and investment from birth. And most importantly, they provide some publicly seeded capital to every eligible child. But they also have some major design flaws that, if left unfixed, would make these accounts virtually unusable for many people. Below are the near- and long-term actions we recommend to make Trump Accounts work for the families who need them most.

Near-Term Improvements: What Treasury and the IRS Can Do Now

Over the next six months, the IRS and the U.S. Department of the Treasury will define how Trump Accounts actually function. This rulemaking period is critical.

1. Make Enrollment Automatic, Not Conditional on Tax Filing

Currently, Trump Accounts require families to file tax returns to enroll or sign up through a portal that will be available later in the year, similar to the portal for Economic Impact Payments during COVID. If left in place, this opt-in account opening system will leave low-income families behind.

The good news is that a proven solution exists: automatic enrollment of all newborns and dependents under age 18. An opt-in approach versus a time-tested opt-out will ensure that all eligible children will be able to start building wealth at birth. Thankfully, this approach does not require new legislation. Treasury already has the authority to automatically create accounts tied to Social Security numbers at birth. It should use that authority to make sure every kid benefits from the accounts.

Decades of evidence shows that automatic, opt-out enrollment into saving and investing programs is necessary to achieve equity. For example, when Maine’s state-wide program shifted from opt-in to opt-out enrollment for child savings accounts, participation rose from roughly 40 percent to near-universal coverage. Just this week, the Urban Institute published a new analysis estimating that if Trump Accounts are tied to an opt-in tax filing design, families in the bottom income quintile would forgo nearly $600 million in potential federal contributions and returns.

2. Set Strong Standards for Financial Institutions

Treasury should establish a centralized administrative framework with strict eligibility standards for financial institutions, including:

• Low, capped fees (e.g., ≤0.5 percent)
• Strong consumer protections
• Plain-language disclosures
• Default investment options designed for long time horizons
• Strong requirements protecting the privacy of account holders (no sharing of personal information without proper consent)
• Ongoing reporting and transparency obligations
• Required financial education components

The Administration should prioritize inclusion, simplicity, and long-term stewardship.

3. Make Sure Assets Don’t Count against Eligibility for Other Benefits

Treasury should explicitly clarify that Trump Accounts, including supplemental contributions from states and tax-exempt entities, qualify under the general welfare exclusion. This will ensure this public benefit does not count against asset limits and savings penalties tied to other government benefits.

Clearly stating that the general welfare exclusion applies would avoid decades of legal ambiguity that could temper participation. Clear statutory language matters here, especially given past litigation challenging IRS interpretations.

4. Simplify and Standardize Supplemental Contributions for Low-Income Families at Scale

Trump Accounts are not means-tested ($1,000 at birth for every newborn during the three-year pilot period, regardless of income). However, supplemental contributions can be added to Trump Accounts tied to income thresholds or specific ZIP-code median incomes (such as Michael & Susan Dell’s $6.25B commitment to fund accounts in children who reside in zip codes where the median income is less than $150,000).

Treasury should design systems that allow philanthropies, states, and employers to make supplemental contributions without burdensome administrative requirements or the collection of personally identifiable information. If supplemental contributions are technically difficult, there will be fewer of them.

By defining qualified geographic areas using transparent, equity-focused criteria and linking them to outreach and reporting, Treasury can ensure that Trump Accounts reach children in communities facing the greatest barriers to economic mobility. This means defining and adopting transparent, data-driven criteria and data sources for criteria that might be utilized for supplemental contributions, such as ZIP code-level median income contributions, child poverty rates, and school-level designations such as Title 1 status. Treasury should commit to publishing a methodology, updating it on a schedule, and monitoring results.

Longer-Term Legislative Fixes

Some improvements require Congress to act, not regulators.

1. Fix the Tax Treatment

Trump Accounts currently resemble traditional IRAs, with investment earnings and pre-tax withdrawals taxed as ordinary income (though after-tax contributions will not be double-taxed).

Congress should consider aligning Trump Accounts with Roth-style treatment, where gains are not taxed at withdrawal. That would effectively redesign them as a best-of hybrid combining the public seeding of Trump Accounts with the tax advantages of 529 plans. If the policy goal is wealth building, taxing withdrawals undercuts the objective.

2. Simplify the Code

The U.S. has a fragmented, confusing web of child-focused savings vehicles: 529s, Coverdells, tax credits, baby bonds, and now Trump Accounts. Complexity lowers uptake.

There is a strong case for consolidation and simplification, echoing long-standing bipartisan calls for a cleaner, more coherent tax and savings code that ordinary families can actually navigate.

3. Restore Complementary Family Supports

Trump Accounts cannot substitute for income supports. The elimination of the expanded Child Tax Credit removed thousands of dollars per year from low- to moderate-income families. A Trump Account one-time $1,000 deposit, while meaningful, cannot offset that loss. Congress should restore the Child Tax Credit, which is a necessary ingredient to help make asset accumulation and wealth building possible for the Americans who need it most. Restoring the Child Tax Credit is the most low-hanging-fruit example, but there are myriad other future policy opportunities our legislators have to help the poorest American households.

4. Expand Public Seeding Beyond Birth Cohorts and Consider Progressive Public Seeding

Congress should consider means-tested $1,000 public deposits for older children (ages 4-18) to ensure asset building is not limited to a narrow birth window. There is also an opportunity to explore progressive public seeding for future birth cohorts (higher dollar amounts for lower-income households).

5. Make the Program Permanent

Trump Accounts are currently set to expire in 2029. If the policy is worth doing, it is worth doing permanently.

Conclusion

Trump Accounts are here, and they could shape real-world, long-term outcomes for millions of children. Whether they become a narrow tax-advantaged savings vehicle or a meaningful engine of broad-based opportunity depends on choices made now by regulators, lawmakers, and civic leaders.

This is a moment for pragmatism, not purity. We should be honest about the bill’s flaws, clear-eyed about the risks, and ambitious about the fixes.

With thoughtful design and sustained political will, Trump Accounts could evolve into something far more powerful than their origins suggest: a universal, inclusive foundation for the next generation’s financial security.

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Pamela Harder is the Executive Director of Goodman Philanthropies, where she leads the organization’s mission to expand economic mobility for individuals and families across the United States. She has built her career at the intersection of education, workforce development, and financial inclusion, with a focus on designing systems that translate talent into long-term economic security. Prior to joining Goodman Philanthropies, Pam led go-to-market sales strategy at Guild Education, a leading upskilling and career mobility platform for working adults. She previously spent four years in her home state government, where she designed, executed, and scaled initiatives to better align Virginia’s higher education and workforce systems — including architecting the largest-ever investment in tech talent, $1.1B Tech Talent Investment Program. Earlier in her career, Pam worked at FSG, a global nonprofit consulting firm, where she advised a wide range of education- and workforce-focused organizations, including the Gates Foundation, family foundations, and regional cross-sector partnerships focused on career-connected education and training. She also has worked internationally (Mumbai, India) for an early-stage fintech company focused on alternative credit models.

Pam’s writing and research have been published in The Atlantic, National Journal, Stanford Alumni Magazine, and the Journal of Education and Work. She holds a bachelor’s degree in economics from Stanford University, a Master of Public Policy from Harvard Kennedy School, and an MBA from Harvard Business School.

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Goodman Philanthropies supports innovative, evidence-based solutions that expand economic mobility across the United States. We prioritize approaches that combine rigor, innovation, and scale to move the needle on poverty and opportunity. Our work is generously funded by Bennett & Meg Goodman, who are committed to dismantling barriers to upward mobility through strategic, impact-driven philanthropy. Goodman Philanthropies funds new and innovative tools, policies, and ideas that enable more low- and moderate-income Americans to participate in asset-building.

Recently, Goodman Philanthropies awarded grants to the Center for Taxpayer Rights, Aspen Institute’s Financial Security Program, and Urban Institute’s Tax Policy Center, all of which are focused on ensuring Trump Accounts are designed and structured to build wealth inclusively, and to reach families with low incomes and low wealth. Learn more and get in touch at www.goodmanphilanthropies.org.