Trump Accounts and 529 Plans: A New Planning Opportunity for Families

Client Alert | July 2026

By Thomas J. Taricani, CPA/ABV, CVA, CEPA

For families thinking beyond education costs, the new Trump Account creates an additional planning tool that may work best not as a replacement for a 529 plan, but as part of a broader strategy for long-term wealth accumulation and intergenerational wealth planning.

The recently enacted One Big Beautiful Bill Act introduced Trump Accounts as a new savings vehicle for children. While much of the media attention has focused on the federal government’s $1,000 contribution for certain children born between 2025 and 2028, the broader value may lie in how these accounts complement existing planning tools.

For many families, the key question is not whether to use a Trump Account or a 529 plan, but how the two can work together.

What Is a Trump Account?

A Trump Account is a special type of individual retirement account (IRA) established for a child under age 18. The child is the account owner, while a parent or guardian manages the account until adulthood. Contributions and investment growth occur during childhood, and distributions generally cannot begin until the year the child reaches age 18.

Key features include:

• Eligibility for children under age 18 with a Social Security number.
• Annual contributions of up to $5,000 per child.
• Contributions from parents, grandparents, employers, charitable organizations, and others.
• Investments limited primarily to broad market index funds and ETFs.
• Potential eligibility for a one-time $1,000 federal contribution for qualifying children born between January 1, 2025, and December 31, 2028.

For higher-net-worth families, the primary benefit is not the government contribution. Rather, it is the ability to create long-term, tax-deferred growth for children and grandchildren over many decades.

How Do Trump Accounts Compare to 529 Plans?

Both vehicles are designed to benefit children, but they serve very different objectives.

529 Plans: Best for Education Funding

For families whose primary goal is paying for education, a 529 plan generally remains the preferred choice. As noted, 529 plans offer tax-free growth and tax-free distributions when funds are used for qualified education expenses.

In addition, 529 plans offer several advantages:

• High contribution capacity.
• Ability to front-load gifts using five-year gift tax averaging.
• Tax-free withdrawals for qualified educational expenses.
• Flexibility for college, graduate school, certain K-12 expenses, and vocational education.

For grandparents and parents seeking to fund future education costs, these benefits continue to make 529 plans an attractive planning tool.

Where Trump Accounts May Provide Additional Value

Trump Accounts were not created primarily as education savings vehicles. Instead, they are designed to function more like long-term investment accounts. As a result, they offer several advantages that differ from a 529 plan.

Greater Long-Term Flexibility

One common concern with education-focused planning is uncertainty regarding a child's future educational needs. Not every child will attend a four-year university, incur significant education costs, or require substantial 529 assets. Some may receive scholarships, pursue vocational training, start businesses, or enter the workforce directly.

Because Trump Accounts are not education-specific, they provide broader wealth-building flexibility than a 529 plan. After age 18, the account generally transitions into traditional IRA treatment, allowing the beneficiary to continue building wealth for future goals.

No Earned Income Requirement

Unlike custodial Roth IRAs, Trump Accounts can receive contributions even when a child has no earned income. This may create additional family wealth planning opportunities for parents and grandparents who wish to begin funding investments for young children or grandchildren early in life.

A Head Start on Retirement Savings

One of the most compelling aspects of a Trump Account is the potential impact of decades of compounding. Consistent contributions during childhood may allow a child to begin adulthood with a meaningful investment account capable of growing for many additional years. Many advisors view Trump Accounts as an effective way to provide a long-term head start on retirement savings.

Planning Considerations for Higher-Net-Worth Families

For many families with broader wealth-transfer goals, the optimal strategy may involve using both accounts.

A practical hierarchy may include:

First Priority

• Maximize available retirement savings opportunities.
• Implement annual gifting strategies where appropriate.
• Utilize 529 plans for expected education funding needs.

Second Priority

• Consider annual Trump Account contributions for children and grandchildren.
• Incorporate Trump Accounts into broader family wealth-transfer planning.

By combining both approaches, families may be able to create dedicated educational funding through a 529 plan while simultaneously establishing a long-term wealth accumulation account through a Trump Account.

Potential Limitations

Trump Accounts are not intended to replace trusts, 529 plans, or other sophisticated estate planning tools. They should generally be viewed as a supplemental planning vehicle.

Families should also recognize that:

• Annual contributions are capped at $5,000.
• The accounts generally receive traditional IRA tax treatment, rather than Roth tax treatment. Future distributions are generally taxable as ordinary income.
• Funds generally cannot be accessed before adulthood.

Bottom Line

Trump Accounts are unlikely to replace 529 plans, trusts, or other established planning tools, but they may become a meaningful addition for families focused on long-term investing and wealth transfer.

The most effective strategy for many families may not be choosing between a 529 plan and a Trump Account, but thoughtfully combining both to achieve multiple objectives: funding education, transferring wealth efficiently, and establishing long-term financial security for children and grandchildren.

How We Can Help

As Treasury and IRS guidance continues to develop, families should evaluate how Trump Accounts fit within their overall tax, estate, and wealth-transfer plans. Boyer & Ritter can help assess whether these accounts complement your existing education, retirement, and legacy planning strategies.

Thomas J. Taricani, CPA/ABV, CVA, CEPA is a Principal of Boyer & Ritter and has more than 35 years of experience advising closely held and family‑owned businesses on succession planning, business valuations, and exit strategies. He works closely with business owners and their advisory teams to design and implement practical transition plans that support continuity, preserve family wealth, and align with long‑term goals. He can be reached at ttaricani@cpabr.com