5 Reasons To Think Twice Before Investing Your Own Money Into a New ‘Trump Account’

Chris Adam

Tue, February 24, 2026 at 1:21 AM GMT+9 2 min read

When it comes to personal finance and children, Trump Accounts have grabbed recent headlines. According to the administration of President Donald Trump, the program is designed to build long-term financial security of kids through tax-advantaged investment accounts.

For eligible children, $1,000 will be contributed to the account. But before you invest your own money, read the concerns an attorney and financial expert shared with GOBankingRates.

Also see three alternatives to a Trump Account that will yield more savings for your child.

1. Private Data

“The $1,000 pilot contribution requires parents to submit their child’s Social Security number through a government portal that recently launched,” said Chad Cummings, an attorney and CPA at Cummings & Cummings Law, who previously worked in finance and tax with American Airlines, PwC and JPMorgan Chase. “No audit of that portal’s data security has occurred. Parents hand over their child’s identity data to a system with no track record.”

Read More: Everything You Need To Know About ‘Trump Accounts’ Launching in 2026

Find Out: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too

2. Lack of Control

According to Cummings, the account locks all contributions until the child turns 18. Parents cannot access the funds for emergencies.

“That’s a key point,” he added. “At 18, the child gains control and can withdraw the balance, potentially triggering income tax on the entire amount. A parent who contributes $5,000 per year for 12 years surrenders control of $60,000 in principal plus growth to a teenager with zero obligation to use it for housing or retirement.”

3. Some Unknowns

Further, per Cummings, in Florida and Texas, IRAs receive creditor protection under state creditor protection law, which is a major benefit, but the rules surrounding Trump Accounts remain unclear.

“No court has yet ruled on whether these accounts qualify for state creditor protection,” he noted. “Your child’s account may face exposure to judgment creditors and divorce proceedings with no shield. There are many unknowns here which need to be ironed out through case law.”

4. Impacts on Federal Aid

The account counts as the child’s asset for FAFSA purposes, Cummings added.

“That’s another key point: The federal formula assesses student assets at 20 percent. A balance of $100,000 at age 18 reduces aid eligibility by $20,000,” he said.

5. Lack of Tax Deductions

Cummings shared a final concern: No tax deduction exists for contributions.

“Parents fund this account with post-tax dollars, receive no deduction and lose control of the money on a certain date,” he said. “These accounts grabbed a lot of headlines but have fizzled out upon arrival. They just don’t compete, so to speak, with tax-advantaged alternatives.”

Story Continues  

Editor’s note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.

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This article originally appeared on GOBankingRates.com: 5 Reasons To Think Twice Before Investing Your Own Money Into a New ‘Trump Account’

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