ABOUT THE AUTHOR:
John Cooper, Senior Private Client Advisor
John is steeped in the Carolina tradition of helping one’s neighbor. As a Senior Private Client Advisor, he enjoys exercising his neighborly skills by listening to clients about their hopes, dreams, and aspirations to help them create a plan to achieve what is important to them.
In the financial planning profession, proverbs are commonly used to explain investment concepts. One of my favorites is “The best time to plant a tree was 10 years ago. The second best time is now.” The new Section 530A account – commonly referred to as a Trump Account – puts that proverb into action.
Creation of the Trump Account
In early July 2025, the U.S. Senate passed the One Big Beautiful Bill Act (OBBBA). President Donald Trump signed the OBBBA into law on July 4, 2025. Among its provisions, the OBBBA created IRS tax code Section 530A. This section outlines the rules governing the government-seeded, tax-advantaged investment accounts known as Trump accounts. Section 530A accounts are currently expected to launch by July 2026.
Why were the accounts created? The U.S. savings rate hit an all-time high of 10%-13% of income in the 1970s. By contrast, in the 2020s, the rate declined significantly to approximately 3%-4%. Trump accounts were created to help children establish a strong, long-term financial foundation and encourage a culture of saving and investing from an early age.
So, How Do They Work?
American children born between January 1, 2025, and December 31, 2028, will receive a one-time $1,000 contribution from the U.S. Treasury. The account offers tax-deferred growth until funds are withdrawn. Generally, withdrawals are not permitted before age 18. At age 18, the account will convert into an Individual Retirement Account (IRA).
How to open an account
To open an account, you may file IRS Form 4547 with your 2025 tax return. You can also complete the form and find more information on the official enrollment website.
Investment of Funds
Funds held in a Section 530A account may be invested in certain low-cost, broadly diversified U.S. equity index funds, similar eligible stock market funds or Exchange Traded Funds (ETFs).
Who Qualifies?
To qualify for a 530A account, a child must meet the following requirements:
- Be under age 18
- Have a valid Social Security number
- Have a parent or guardian oversee the account
- Be a U.S. citizen to receive the $1,000 Treasury contribution
Additional Contributions
In addition to the one-time $1,000 “seed” contribution, up to $5,000 may be contributed annually. Of that amount, up to $2,500 may come from employer contributions. Employer contributions count toward the $5,000 annual maximum. Additional contributions may be made by parents, grandparents, other family members, friends or non-profit organizations.
Importantly, contributions to a Section 530A account do not reduce or affect contribution limits for other tax-advantaged retirement accounts, such as 401(k)s or IRAs.
Section 530A accounts provide a valuable opportunity to help young people benefit from long-term, compounded growth while saving for their future. Because the program is still in its early stages, certain provisions may change over time. If you are unsure how to proceed, consider consulting with a trusted financial advisor.
John Cooper
Senior Private Client Advisor
A native of Greenwood, John offers expert guidance and support to families and individuals. He provides comprehensive wealth management services such as portfolio allocation, insurance analysis, and retirement planning.
After helping his clients identify their goals, John will put together a comprehensive financial plan, tailored to each client’s specific needs. It serves as a map to help clients reach their goals: to lower taxes, preserve and protect assets, create a qualified retirement plan, or leave a legacy behind. Learn more about John here.
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First Published: This article was originally published in the Index Journal and has been republished with permission.
The information contained within has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy. The opinions expressed are subject to change from time to time and do not constitute a recommendation to purchase or sell any security nor to engage in any particular investment strategy. Investment Advisory Services are offered through Greenwood Capital Associates, LLC, an SEC-registered investment advisor.
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