NEW · TRUMP ACCOUNTS LIVE JULY 4, 2026

Which account does your child actually need?

Trump Account, 529, Coverdell, UTMA, custodial Roth IRA — five very different accounts, and most parents have no idea which ones their kids should have. Here's the plain-English comparison, and what to actually do with the new Trump Account.

Account	Best for	2026 contribution limit	Taxes	Who controls it
Trump Account Free $1,000	Every child born 2025–2028 — capturing the free $1,000 federal seed.	Up to $5,000/yr from family (employers/charities/government extra).	Tax-deferred growth; withdrawals taxed as ordinary income. Locked until 18, then traditional-IRA rules.	Held for the child; can't be withdrawn before 18.
529 Plan	College and up to $10,000/yr K–12 tuition. The education workhorse.	No federal annual cap; gifts up to ~$19,000/donor (2025) avoid gift tax. High lifetime limits.	Tax-free growth & withdrawals for qualified education; many states give a deduction. Up to $35k lifetime can roll to the child's Roth.	Account owner (usually the parent) stays in control.
Coverdell ESA	Flexible K–12 + college savings with wide investment choice.	$2,000/yr per child; phases out at higher incomes.	Tax-free growth & withdrawals for qualified education.	Custodian controls it; must be used by age 30.
UTMA / UGMA	Any goal, maximum flexibility — no restrictions on use.	No limit (gifts above ~$19,000/donor may trigger gift tax).	No special break; earnings subject to "kiddie tax."	Becomes legally the child's at the age of majority (18–21).
Custodial Roth IRA Secret weapon	Kids who earn income (summer job, etc.). Decades of tax-free growth.	Up to the child's earned income, max $7,500 (2026).	Tax-free growth & tax-free withdrawals in retirement.	Custodial until the child becomes an adult.

Educational summary only — not investment, tax, or legal advice. 2026 figures; rules and limits are set by law and may change. Confirm specifics with the IRS or a qualified professional.

The order most families should fund them in

When money is limited, this sequence usually does the most good per dollar.

Capture free money first. Claim the $1,000 Trump Account for eligible kids, and any employer 401(k) match for yourself.

Secure the parents. Emergency fund + your own retirement come before the kids' college — you can borrow for college, not retirement.

Education savings. A 529 (and/or Coverdell) for college and K–12, automated even at $25/month.

Flexible & long-term. A UTMA for flexibility, and a custodial Roth IRA the moment your child earns income — the single highest-leverage account a kid can have.

"My kid got a Trump Account — now what?"

Do this

Claim the free $1,000. If your child qualifies, set it up and take the government's money.
Let it compound in its low-cost U.S. index fund, untouched until age 18.
Then fund the better buckets — a 529 or custodial Roth usually does more per dollar.

Be careful

Don't rush to add your own money. Trump Accounts have more restrictions and fewer tax breaks than 529s, custodial Roths, and UTMAs.
Withdrawals are taxed as ordinary income, and it's locked until 18 (then follows traditional-IRA rules).
It's not "college money" — it's a long-term, retirement-style account for your child.

Want this figured out for your family?

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