On December 2, 2025, the IRS issued Notice 2025-68 to provide a general overview of how Trump Accounts will work, and to address initial questions about eligible investments, distributions, reporting and coordination with the rules applicable to other types of Individual Retirement Accounts.

Trump Accounts can be established in 2026, using IRS Form 4547, for any child though age 17. The contribution limit will be $5,000 per child per year. Contributions may begin after July 4, 2026. Distributions from Trump Accounts generally will not be permitted until the year the child turns 18. At that point, the account will be treated similarly to a traditional IRA, so that distributions will be taxable and potentially subject to penalties if the account owner is younger than 59½. There will be no tax deductions for contributions to Trump Accounts, but the account will grow tax-deferred until distributions begin. The accounts will be invested in certain mutual funds or exchange-traded funds that track the S&P 500 or another index of primarily American stocks.

In addition to creating a valuable financial resource for the child, the hope is that the beneficiary will become engaged in the growth of the free market economy.

Seed money. To encourage rapid adoption of the Trump Accounts, the federal government will make a one-time $1,000 contribution to the Trump Account of each eligible child born on or after January 1, 2025, through December 31, 2028. The child must have a Social Security number to be eligible.

In December, Michael and Susan Dell (of Dell Technologies) announced that they would contribute $250 to Trump Accounts for some of the children who are not eligible for the $1,000 seed money from the federal government, that is, the children born in the U.S. before January 1, 2025, who are up to 10 years old. The gift will be limited to zip codes where the median income is below $150,000. An estimated 25 million children could potentially receive this benefit, according to press releases. The pledge from the Dells is $6 billion. If the money is not used up by the younger children, the Dells may extend the program to children older than 10. The Dells also announced that Dell Technologies would match the $1,000 government contribution to Trump Accounts for their employees, and other companies may follow that lead.

Example.  Here is an illustration of the potential of a Trump Account provided by an online financial planning site [https://www.kitces.com/blog/taxable-accounts-custodial-kiddie-tax-obbba-trump-accounts-one-big-beautiful-act-roth-rmd-529-plan/].

Parent contributes a maximum amount to a Trump Account for 17 years, plus the account has $1,000 in seed money.  Inflation is assumed to be 3% per year for the period, and investments earn 8%.  On the child’s 18^th birthday the account would be worth $250,069, after total Parent contributions of $116,300.  The remaining $133,769 is the growth of the account.  If the child leaves the account untouched, and assuming that the 8% growth continues, it will be worth $6,336,611 at age 59 ½.

That sounds almost too good to be possible.  On the other hand, no one predicted that IRAs and 401(k) accounts would, in the aggregate, be worth trillions these days.