Trump Accounts: A New Way to Build Generational Wealth

Parents and grandparents have always wanted the same thing for the next generation: a better start than they had.

For some families, that means helping pay for college. For others, it’s assistance with a first home, starting a business, or simply leaving an inheritance. Those are all worthwhile goals. But after nearly 40 years helping families build wealth, I’ve become convinced that one of the greatest gifts we can leave our children isn’t simply money.

It’s an ownership mindset.

Children who understand how wealth is created, how businesses grow, and how investing works have an enormous advantage over those who don’t. That’s one of the reasons I find the new Trump Accounts so intriguing. Whether you agree with every aspect of the legislation or not, the concept behind these accounts encourages something America needs more of: young people becoming investors instead of simply consumers.

Most discussions about Trump Accounts immediately focus on the rules. Who qualifies? How much can be contributed? What are the tax benefits? Those are important questions, but I don’t think they’re the most important ones.

The biggest advantage isn’t the tax treatment.

It’s time.

A child who begins investing shortly after birth has something no adult can ever recreate: decades of compound growth. Think about planting an oak tree. The best time to plant it was twenty years ago. The second-best time is today. Investing works much the same way. Even modest contributions made consistently over many years can potentially grow into meaningful assets because time does much of the heavy lifting.

A Trump Account is a tax-advantaged investment account designed for children under age 18. The account is owned by the child while being managed by a parent or authorized adult until adulthood. Current rules provide that investments are automatically directed into a low-cost exchange-traded fund that tracks the S&P 500, giving young investors ownership in hundreds of America’s leading companies. That last point is worth emphasizing. Children aren’t simply accumulating savings. They’re becoming owners of businesses that innovate, hire employees, manufacture products, and help drive the American economy.

For children born between January 1, 2025, and December 31, 2028, the federal government may provide a one-time $1,000 contribution once the account is properly established. Families can then make additional contributions, subject to annual limits established under the program. Like any investment account, values will fluctuate with the markets, and there are no guarantees. These accounts should be viewed as long-term investments, not short-term savings accounts.

What excites me even more than the account itself is the conversation it creates within families.

Imagine a grandparent contributing to a Trump Account every birthday instead of buying another toy that will be forgotten in a few months. Imagine sitting down once a year and showing a grandchild how owning pieces of American businesses has allowed their account to grow over time. Those discussions naturally lead to conversations about patience, compound growth, diversification, and delayed gratification. In my experience, those lessons often become far more valuable than the dollars themselves.

That doesn’t mean Trump Accounts replace every other planning strategy. They don’t.

Many families will continue using 529 plans because of their attractive education benefits. Others may prioritize retirement savings, emergency reserves, or estate planning. Financial planning has never been about finding one perfect solution. It’s about selecting the right combination of strategies for each family’s unique goals. Trump Accounts simply provide another planning tool that may complement an already well-designed financial plan.

One of my concerns today is that too many young adults enter the workforce knowing how to spend money but very little about how money grows. Schools often do an excellent job teaching mathematics, science, and history, but many students graduate without understanding investing, compound interest, diversification, or long-term wealth creation. Parents and grandparents have an opportunity to change that. A Trump Account can become more than an investment account. It can become a teaching tool.

Bob’s Perspective

One of the things I enjoy most about my profession is watching families think beyond their own retirement and begin planning for future generations. The strongest financial legacies I’ve seen weren’t created because parents left the largest inheritances. They were created because they passed along sound financial habits.

Trump Accounts won’t make every child wealthy. They aren’t guaranteed, and they aren’t appropriate for every family. But I do believe they encourage exactly the kind of thinking our country needs more of: ownership, personal responsibility, patience, and long-term investing.

At Rubin Wealth Advisors, we believe wealth isn’t simply transferred from one generation to the next. It is taught. And helping children become investors at an early age may be one of the smartest investments a family ever makes.

Bob Rubin is the Founder and President of Rubin Wealth Advisors, based in Boca Raton, Florida. Learn more at https://www.rubinwealthadvisors.com