Why Older Kids Shouldn't Miss Out on Trump Accounts

Many families assume older children have already missed their chance to benefit from Trump Accounts. That misconception stems largely from the federal government's $1,000 seed contribution, which is limited to children born during the program's eligibility window.

The opportunity, however, extends well beyond the federal deposit. Private organizations, employers, and families are increasingly using Trump Accounts to help older children begin building long-term savings, even if they are not eligible for the government's initial contribution. As those opportunities expand, families who assume the window has already closed for school-age children and teenagers may be overlooking meaningful financial benefits.

The Center for a Free Economy has previously highlighted how Trump Accounts can help expand investment ownership and encourage long-term saving. Recent private-sector commitments have strengthened that case by extending new opportunities to millions of older children.

Private Capital Is Following Older Children

The federal government's $1,000 contribution has received the most attention, but it is only one part of the program.

Several private organizations have announced initiatives specifically aimed at children who are already well beyond infancy. The Michael & Susan Dell Foundation has committed $250 for millions of children ages 10 and younger. SpaceX President Gwynne Shotwell has pledged $325 million in company stock for approximately 2 million children ages 11 through 17. Employers including Goldman Sachs, JPMorgan Chase, Chipotle, and others have also announced matching contributions for employees' children.

Families cannot receive those contributions without first opening a Trump Account. Parents who assume an older child no longer qualifies for meaningful benefits may unintentionally miss opportunities that remain available today.

Parents, grandparents, relatives, employers, and others may collectively contribute up to $5,000 annually, allowing families to continue building savings regardless of whether a child qualified for the original federal deposit.

You Didn't Miss Your Chance to Open an Account

Another common misconception is that families had to open a Trump Account during tax filing season.

The Internal Revenue Service made establishing an account especially convenient while taxpayers filed their returns, but that was only one way to get started. Families who did not open a Trump Account during tax season can still establish one through the official Trump Account mobile app, making it possible to begin saving and investing at any point during the year.

Delaying until the next tax season only postpones future contributions and the opportunity for long-term compound growth.

The Tax Comparison Misses the Bigger Picture

Another common criticism is that a taxable brokerage account offers better tax treatment.

That comparison often focuses on the first few years rather than the account's full investing life. Brokerage accounts generally expose dividends to annual taxation, capital gains to taxes when investments are sold, and larger amounts of investment income for minors may also be subject to the kiddie tax.

Trump Accounts follow a different approach. Investments grow without annual taxation while the account holder is a child. Later, the balance may be converted gradually into a Roth IRA during lower-income years, potentially allowing decades of tax-free growth after conversion.

Families evaluating Trump Accounts should consider the long-term tax treatment rather than comparing only the earliest years.

The Roth Conversion Is a Long-Term Planning Decision

Some critics point out that converting a Trump Account into a Roth IRA may not make sense as soon as the account holder becomes eligible. In many cases, the better strategy is to begin conversions during the early years of a career, when taxable income is often lower.

Many young adults spend several years in relatively low tax brackets before reaching their peak earning years. Converting portions of the account over time during those lower-income years may reduce the tax cost while preserving the long-term advantages of tax-free retirement growth.

The value of the account lies in that flexibility, not in reaching a single deadline.

Control Concerns Apply to Nearly Every Custodial Account

Parents also frequently raise concerns about children eventually controlling the account.

That feature is common across custodial savings vehicles. Assets held under the Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) also become the child's property once the applicable age is reached.

Trump Accounts include an important distinction. Because the assets remain within a retirement account structure, early withdrawals generally trigger ordinary income taxes and a 10% penalty. Those restrictions create a meaningful financial disincentive to spend retirement savings prematurely, providing stronger guardrails than many traditional custodial accounts.

Starting Later Is Still Better Than Never Starting

Long-term investing always benefits from starting earlier, but that does not mean older children have missed their opportunity.

The purpose of Trump Accounts is to help more Americans become investors early in life and benefit from long-term compound growth. According to government projections, a child receiving the $1,000 federal contribution along with the maximum annual contributions could accumulate approximately $271,000 by age 18 under the program's assumptions. Even without the federal seed deposit, years of family contributions, employer matching, private-sector incentives, and investment growth can still produce meaningful long-term results.

For many families, the better question is not whether a child missed the first opportunity, but whether delaying another year makes financial sense.

CFE Takeaway

Trump Accounts were designed to help more Americans become investors and build wealth over time. While the federal government's $1,000 seed contribution has drawn the most attention, it is no longer the only reason to open an account.

Older children can still benefit from private-sector contributions, employer matching programs, family investments, and decades of compound growth. Families who did not open a Trump Account during tax season have not missed their opportunity. Opening an account remains straightforward through the official Trump Account mobile app, allowing families to begin investing whenever they are ready rather than waiting for another filing season.