How a Trump Account works
A Trump Account is a new type of individual retirement account (IRA) for children, created by the Working Families Tax Cuts (the One Big Beautiful Bill Act). Established by a parent or guardian for a child under 18, it is invested in low-cost funds that track the S&P 500 or another U.S.-equity index. Earnings grow tax-deferred, and switching investments inside the account is not a taxable event.
Contribution limits
Contributions from all sources are capped at $5,000 per year (indexed for inflation after 2027). Within that limit, an employer may contribute up to $2,500 per year, and that amount is excluded from the employee's taxable income. Contributions cannot be made before July 4, 2026.
When can the money come out?
Funds generally cannot be withdrawn before January 1 of the year the child turns 18. After that point the account is generally treated as a traditional IRA: withdrawals of investment gains are taxed as ordinary income at the child's rate, while amounts attributable to after-tax contributions come out tax-free. To open an account and enroll in the pilot, use IRS Form 4547 or visit trumpaccounts.gov.
How this calculator works
The tool starts with the optional $1,000 federal seed and compounds it at your chosen annual return until the child reaches 18. Family and employer contributions are treated as an ordinary annuity (added at each year-end): the employer amount is capped at $2,500 and the combined family-plus-employer amount is capped at $5,000 per year. It then reports total contributions (including the seed) versus investment growth. Returns are illustrative, not guaranteed, and taxes on withdrawal are not modeled. The engine is verified with Node test cases against a closed-form future-value formula.