Seventy million children now have one. Dell and SpaceX insiders are putting stock in them, and Musk says a share of SpaceX is coming for every kid next year. What the account is, what changed in October, and how it stacks up against the 529, the UTMA and the custodial Roth.
Trump Accounts: A Primer, and What Changed in October
A Trump Account is a traditional IRA for a minor. Anyone can fund it, the money sits in an S&P 500 index fund, and nobody can touch it until 18. It is not a college account. It is a retirement account that starts at birth.
How it works
Money in
- AFTER-TAX · COUNTS TOWARD $5K CAPFamily and friends
- PRE-TAX · COUNTS TOWARD CAPEmployer, up to $2,500/yr
- PRE-TAX · OUTSIDE THE CAPFederal $1,000 seed
- PRE-TAX · OUTSIDE THE CAPCharitable gifts (Dell, Musk)
Ages 0-17
- U.S. equity index funds only, ≤0.10% fee. Default: SPYM at 0.02%.
- No withdrawals. No parent stock picking.
- Donated single stocks: cannot refuse, cannot sell for 5 years.
Age 18+
- Normal IRA rules. 10% penalty before 59½ unless an exception applies.
- Family contributions come out tax-free. Everything else is ordinary income.
- Or convert to a Roth while the kid is in a near-zero bracket.
What changed in October
- Sep 30Stock donations allowed. Temporary regs let companies and stockholder charities give individual shares to a class of accounts. Comments due Nov 30.
- Oct 1Auto-enrollment. Treasury opened an account for every eligible child under 18, about 60 million. Parents still must claim it in the app to receive any money.
- Oct 770 million enrolled. Week-one claims on auto-enrolled accounts: about 164,000, under 0.3%.
- Oct 19Musk's pledge. One SpaceX share to "every kid in America" next year. No eligibility rules, no mechanics. The White House and Brad Gerstner say it flows through Trump Accounts.
- Oct 20-21Under-40 expansion floated. Gerstner and Sen. Moreno want adults in. That needs Congress.
Who is giving what
Sources: CNBC, Treasury, InvestmentNews, 24/7 Wall St. Pledges are not deliveries.
For Orange County families: the Dell $250 is ZIP-code income-tested and most coastal and south-county ZIPs sit above the $150K median. The federal $1,000 has no income test. Musk's share, if it comes, can only land in a claimed account.
Per 24/7 Wall St. reporting. Past performance does not predict future results. DePaolo & May clients may hold positions in SpaceX or Dell.
The statute said diversified index funds. Within three months the accounts of 2 million lower-income teenagers are set to hold one aerospace-and-AI stock they cannot sell. A single share will not change anyone's outcome. The precedent might.
How it compares
| Trump Account | 529 Plan | UTMA | Custodial Roth | |
|---|---|---|---|---|
| Job | Retirement, from birth | Education | Anything | Retirement, once the child works |
| Free money | $1,000 seed + philanthropy | None | None | None |
| Annual limit | $5,000 combined | No cap; $95K 5-year front-load | No cap | $7,500 or earned income |
| Tax out | Ordinary income on earnings | Tax-free for education | Capital gains; kiddie tax yearly | Tax-free |
| Access before 18 | None | Any time, qualified costs | Any time | Contributions only |
| Investments | Index funds ≤0.10%; donated stock | State menu, glide paths | Anything | Anything |
| Control at 18 | Child's IRA | Parent keeps control | Child takes it all (CA: 18, up to 25 by election) | Child's |
| FAFSA | Expected excluded | Parent asset, up to 5.64% | Student asset, 20% | Excluded |
| CA state deduction | None | None | None | None |
2026 figures. California offers no 529 deduction, which removes the main plank in the national "529 wins" argument.
For education, the 529 wins. That is not the Trump Account's job.
The move at 18
Convert the new traditional IRA to a Roth while the kid has no income. If the taxable slice fits under the $16,100 standard deduction, the federal bill is near zero. Then it is Roth money for life.
Not a projection of any account. At 6%: ~$155K at 18, ~$1.8M at 60. Investing involves risk, including loss of principal.
The catch: a Roth conversion is unearned income, and while the child is a dependent the kiddie tax pushes anything above ~$2,700 to the parents' rate, often 37%. Convert in slices or wait until the child files on their own. The sequencing is per child, not a rule of thumb.
Things to consider
Still unsettled
If you have a child under 18 and have not claimed the account, that is the one clear action item. How the account fits with everything else depends on your situation, and it is worth a conversation.
DePaolo & May Strategic Wealth is a registered investment adviser with the State of California. This material is for informational and educational purposes only and does not constitute individualized tax, legal or investment advice. Trump Account rules are governed in part by temporary and proposed Treasury regulations and may change. Figures are as of October 21, 2026 and drawn from Treasury, IRS, CNBC, Yahoo Finance, InvestmentNews and 24/7 Wall St. reporting. Hypothetical illustrations assume constant returns, simplified tax treatment, and are not projections of any account. Investing involves risk, including possible loss of principal. DePaolo & May and its clients may hold positions in securities mentioned, including SpaceX (SPCX) and Dell Technologies (DELL). Forward-looking statements reflect current expectations and are subject to change. Consult a qualified professional regarding your situation. Full disclosures at dmstrategicwealth.com/disclosures.