If you’re raising kids in Greater Houston, you already know how fast the costs of their future add up: college tuition, first apartments, maybe even a starter home. A new federal program aims to give children a financial head start: “Trump Accounts,” a type of investment account created as part of President Donald Trump’s recent tax and spending package.
Under this initiative, any U.S. citizen child born between January 1, 2025, and December 31, 2028, can qualify for an account. When a parent or guardian elects to open one, the federal government makes a one-time $1,000 deposit into that child’s Trump Account. That money goes into a broad stock-market index fund and, in theory, grows alongside the child.
Families, friends, employers, and even charities can contribute more money each year. For many Houston parents, the concept is promising but raises questions: How do you open one? Who benefits most? And is this the best place to invest for your child’s future?
Supporters describe Trump Accounts as a modern form of baby bond, encouraging long-term saving and financial literacy. Critics argue the program favors families already able to invest, doing little for households struggling to cover essentials.
Here’s what Houston families need to know to decide whether a Trump Account fits their financial plans.
What Is a Trump Account?
A Trump Account is a long-term investment account for children. The essentials:
Who qualifies: Any U.S. citizen child under 18 with a Social Security number.
Special eligibility window: Children born from 2025 through 2028 are eligible for the $1,000 federal seed contribution, if a parent or guardian opens the account.
Where the money goes: Funds go into low-cost, broad U.S. stock index funds. There’s no need to pick individual stocks.
Contribution limits: Families and others can contribute up to $5,000 per year per child. Employers may cover up to $2,500 of that total. Certain charities and government agencies can add more without counting toward the limit.
The program will roll out in phases. Parents must choose to open the account and will then receive instructions on how to activate it. The parent or guardian manages the account until the child reaches adulthood.
How the Money Grows Over Time
Trump Accounts are designed to leverage compound growth. Early deposits sit in the market and ideally grow for many years.
Since the funds are in broad index funds, performance mirrors the overall stock market. Over 18 to 30 years, consistent contributions can lead to meaningful savings. If markets underperform, growth may slow—just like with any investment.
The core idea is simple: invest early and let the account grow. For Houston families who can contribute regularly, the account may become a helpful resource for college, housing, or even retirement. For others, the $1,000 federal deposit still offers a small but meaningful start.
How Trump Accounts Are Structured
Who is eligible?
Any child under 18 with a valid Social Security number can eventually have a Trump Account. The $1,000 federal contribution is available only for U.S. citizen children born from January 1, 2025, through December 31, 2028, when a parent or guardian files the required form.
What is a Trump Account?
This is a federally supported, tax-advantaged investment account for children. The government provides a one-time $1,000 deposit for each eligible child. Families, employers, and others may contribute up to $5,000 annually. Some nonprofits and public agencies may contribute additional funds.
Where is the money held?
Initially, accounts are managed by a financial agent selected by the U.S. Treasury. Later, families may transfer accounts to approved brokerage firms. All funds are placed in low-fee index funds that track the U.S. stock market.
When does it start?
Although it applies to kids born beginning in 2025, account setup will begin later. Parents must file IRS Form 4547 to open the account and claim the $1,000 contribution. Contributions are scheduled to begin around July 4, 2026, with more details to come.
What About Houston Families?
Tech billionaire Michael Dell and his wife Susan have pledged around $6.25 billion to support the program, offering an extra $250 to as many as 25 million children. This boost applies to kids in ZIP codes where the median household income is under $150,000. That includes many families in neighborhoods across Houston—such as Alief, Pasadena, and Northside.
How to Open a Trump Account
Confirm eligibility Ensure your child is a U.S. citizen, under 18, and has a Social Security number. To receive the $1,000 federal deposit, the child must be born between January 1, 2025, and December 31, 2028.
File IRS Form 4547 As a parent or legal guardian, complete and file this form to open the account and request the contribution. You may submit it at any time or with your 2025 tax return.
Activate the account Once the form is processed, the Treasury Department or its financial agent will contact you. They’ll provide instructions to verify your identity and activate the account online.
Begin contributions Starting mid-2026, you can contribute up to $5,000 per child each year. Family members, friends, and employers can contribute. Qualified organizations may also provide funds above the annual limit.
Understand the investments All money is invested in U.S. stock market index funds with low fees. You won’t select individual stocks—the focus is steady growth over time.
What happens at age 18? When your child turns 18, the account follows IRA-style rules. Some early withdrawals may be allowed for education or a first-time home. Other early withdrawals could result in taxes and penalties.
Think Before You Contribute
Before adding funds, think about how a Trump Account fits with other financial tools like 529 college savings plans, custodial accounts, or Roth IRAs for minors. A trusted Houston-area financial advisor can help compare your options and build a plan that fits your family’s goals and budget.
Stay tuned for our follow-up story featuring insights from a local financial expert. They’ll break down how this new program could affect Houston families in the short and long term.
For parents trying to give their kids a leg up in an expensive world, Trump Accounts might offer one more way to build a better future—especially if you start early and contribute consistently.
HOW TO OPEN A TRUMP ACCOUNT FOR YOUR CHILD
(Always check the latest IRS instructions or talk with a tax professional before filing.)
Confirm that your child qualifies
Start by making sure your child meets the basic rules. Your child must be under 18, a U.S. citizen, and have a valid Social Security number. To receive the $1,000 government contribution, your child also needs to be born between January 1, 2025 and December 31, 2028. Without a Social Security number, you cannot open the account, so that step comes first.
File IRS Form 4547
Once you confirm eligibility, you move on to IRS Form 4547. As the parent or legal guardian, you complete and file this form to create a Trump Account in your child’s name. On the same form, you also request the one-time $1,000 contribution if your child qualifies. You may file Form 4547 at any time, and you can include it with your 2025 federal tax return if that timing works better for you.
Activate the account after Treasury contacts you
After you submit the form, the U.S. Treasury or its financial agent contacts you with the next steps. They send instructions on how to verify your identity and activate the account, usually through a secure website or online portal. You follow those steps to finish the setup. The account only becomes usable after you complete this activation process.
Start making contributions when the program opens
The program sets an official start date for contributions, currently planned for mid-2026, around July 4. From that date forward, you may contribute up to $5,000 per year to your child’s account. That annual total includes money you put in as a parent, along with contributions from a co-parent or guardian, grandparents, relatives, and friends. An employer may also contribute for your child, up to $2,500 of that yearly limit per child for each employee. In addition, some qualified charities, states, and local governments may add extra funds that do not count toward the $5,000 annual cap.
Understand how the program invests the money
The program invests Trump Account funds in broad U.S. stock-market index funds that charge low fees. You do not select individual companies; instead, your child’s account tracks the overall stock market. The goal focuses on slow and steady growth over many years, not quick trades or speculation. Because the account invests in stocks, the balance may rise and fall with the market, just like any other long-term investment.
Know what happens when your child turns 18
Before your child turns 18, the money stays in the account and you cannot use it for everyday spending. When your child reaches 18, the account shifts to follow traditional IRA rules. At that point, your child may qualify to use some of the funds early for certain higher-education costs or a first-time home purchase, depending on the rules in place at that time. Other early withdrawals may trigger income taxes and an additional 10% penalty. If your child leaves the money in place, the account can keep growing and eventually support their retirement.
Get local guidance before you decide
If you feel unsure about how a Trump Account fits into your overall plan, talk with a trusted Houston-area CPA, financial advisor, or tax preparer. Ask that professional to compare this account with other tools you already use or want to use, such as regular savings or investment accounts, Roth IRAs or custodial accounts, and 529 college plans. That way you can choose a mix of options that matches your family’s budget, goals, and comfort level with risk.
Note: Trey McWilliams provided expert commentary for this story. Houston City Beat did not receive compensation for this information.
