Side by side
| Trump Account | 529 plan | Custodial Roth IRA | |
|---|---|---|---|
| Free money in | $1,000 for births 2025 to 2028, donor gifts like Dell's $250 | Some states match or give a tax deduction | None |
| Who can put money in | Anyone, $5,000 a year in total per child | Anyone, with high lifetime limits | Only up to the child's own earned income |
| Investments | U.S. stock index funds with fees of 0.1% or less | The plan's menu | Almost anything |
| Tax on growth | Taxed as income when withdrawn | Tax free for qualified education | Tax free in retirement |
| When it can be used | From the year the child turns 18, under traditional IRA rules | Any time, for education | Contributions any time; growth later |
| Penalty for other uses | 10% additional tax before 59½ on the taxable part, with IRA exceptions such as education or a first home | Income tax plus 10% on earnings for non education use | Income tax plus 10% on early withdrawals of growth |
Which should you use?
- Claim the Trump Account either way. It is free, and the $1,000 and donor gifts only arrive in it.
- Saving for college? A 529 usually wins for family money, because its growth is tax free for education.
- Your teen has a job? A custodial Roth IRA is hard to beat, since its growth is tax free later.
- Saving for a start in adult life? A Trump Account suits money meant for the years after 18, and family and employers can add to it easily through the gift link.
Many families will use more than one. See what a Trump Account could grow to.
Questions people ask
Is a Trump Account better than a 529?
For college savings from family, a 529 is usually better because its growth is tax free for education. But claim the Trump Account anyway: it is free and receives the $1,000 and donor gifts.
Can I have both a Trump Account and a 529?
Yes. They are separate accounts and many families will use both.
Can a Trump Account pay for college?
After the child turns 18 it follows traditional IRA rules, which allow withdrawals for qualified higher education without the 10% additional tax, though income tax still applies to the taxable part.
Is a Trump Account a Roth IRA?
No. It becomes a traditional IRA, so growth is taxed when withdrawn. It can be converted to a Roth IRA under the usual rules.
General information, not tax or legal advice. Rules can change; check IRS.gov and trumpaccounts.gov before you act.