Trump Accounts: What Parents Should Know

Trump accounts (also known as “530A accounts”) are government-created retirement accounts for children, established under legislation passed on July 4, 2025 (known as the “One Big Beautiful Bill”). Parents are expected to be able to open accounts beginning July 4, 2026, and begin contributing on July 5, 2026.

As part of a pilot program, children born between 2025 and 2028 are eligible to receive a $1,000 government contribution when an account is opened. These accounts are new and still evolving, so it's important for parents to understand how they work.

These accounts are new and still evolving, so it's important for parents to understand how they work.

Who Should Open a Trump Account?

A Trump account may make sense for:

• Parents of children born between January 1, 2025, and December 31, 2028 who want to receive the government’s $1,000 contribution

• Parents interested in saving specifically for their child’s long-term retirement, rather than near- or mid-term needs

When Can My Child Access Trump Account Funds?

• Before age 18: Funds are not accessible for any reason

• After age 18: The account transitions to the child as an IRA

• Withdrawals are taxable as income and may be subject to penalties if taken before retirement age (generally 59½) with exceptions, including:

  • Qualified higher education expenses

  • $10,000 for a first time home purchase

  • Large medical expenses

Restricted access is what most clearly sets Trump Accounts apart from UGMA accounts, which allow custodians to use funds earlier for a child’s benefit.

What is a UGMA?

A UGMA (“Uniform Gifts to Minors Act”) account is a custodial investment account where an adult manages assets gifted to a child until the child reaches the age of majority and gains full control. Fabric by Gerber Life offers a kids investment account that is a UGMA account.

UGMA accounts offer flexibility for families who expect to use savings earlier—for education, extracurricular activities, or other child-related costs. The child does not have to be over 18 years old for the custodian to withdraw money from the account.¹

UGMA vs. Trump Account — Key Differences

² Source: https://www.trumpaccounts.gov/

Can My Child Have Both a UGMA and a Trump Account?

Yes. Many families may benefit from using both.

For children born after December 31, 2024 and before January 1, 2029, it may be beneficial to:

• Open a Trump account to receive the $1,000 government contribution

• Also open a UGMA to invest flexibly for education, extracurricular activities, or other expenses that arise before adulthood

For many families, a UGMA can serve as the primary, flexible investment account, while a Trump account will function as a supplemental, long-term layer of savings. The two accounts serve very different purposes.

The Takeaway

A Trump account is worth opening for children born 2025-2028 to capture the government’s $1,000 contribution. A UGMA, like the kids investment account offered by Fabric, helps give families flexibility, control, and a way to invest for a child’s needs along the way.

For many families, using both accounts together may provide the best balance: long-term, tax-advantaged growth paired with flexible investing that supports your child throughout childhood and early adulthood.

Fabric by Gerber Life currently offers UGMA/UTMA custodial accounts and does not offer Trump Accounts. This comparison is for educational purposes only.

¹ Custodian can make withdrawals and use the funds for any purpose that directly benefits the account holder (the minor). Once the account transfers to the account holder, they may use funds for any purpose.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

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