The Brew

| May 2026

The Brew: Trump Accounts – What You Need to Know

INVESTMENT ROUNDTABLE

DATE May 21, 2026
TIME 1:00pm – 2:00pm PDT

We invite you to join our upcoming quarterly Investment Roundtable webinar featuring Sam Miller, Executive Vice President of Investment Strategy at SEIA, Phillip Argue, Director of Investment Strategy at SEIA, and special guest Meera Pandit, Executive Director and Global Market Strategist at J.P. Morgan Asset Management.

This discussion will incorporate perspectives on current market conditions, with a focused look at how artificial intelligence is influencing economic trends, market leadership, and portfolio positioning.

Topics on the agenda include:

AI and markets: how artificial intelligence is shaping growth, productivity, and investment opportunities
Strategic positioning: navigating today’s economic environment amid accelerating technological change
Market dynamics: key forces shaping the months ahead, including AI-driven innovation and capital flows
2026 outlook: key themes, risks, and considerations for investors

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RECENT MEDIA

TRUMP ACCOUNTS: WHAT YOU NEED TO KNOW

Author: Brad Repinsky
Head of Estate, Tax, and Financial Planning

By now, many of you have heard about Trump Accounts (also referred to as 530A Accounts), introduced in the “One Big Beautiful Bill Act,” and set for roll out July 4, 2026. These accounts are designed to encourage long-term investing for children by starting early and compounding over decades.

Like UGMA/UTMA accounts, a parent or guardian manages the Trump Account until the beneficiary child turns 18. At that point, the account converts to a Traditional IRA allowing the beneficiary to take total control, potentially creating planning opportunities. As written today, a potential drawback to the account is individual contributions to Trump Accounts do not appear to qualify as “present interest gifts” and gifting to the account likely requires filing gift tax returns in the year contributions are made.

Key Features

Contribution Limits & Eligibility

Annual contribution limit of $5,000 per child (combined across family, friends, and employers)
Employer contributions up to $2,500 count toward the annual limit but are excluded from the child’s taxable income
Contributions from qualified charities and government entities do not count toward the $5,000 cap
Children under age 18 with a Social Security Number are eligible
Children born between 2025 and 2028 receive a $1,000 initial government contribution

Investment Parameters

Limited to low-cost U.S. equity index funds (e.g., S&P 500 ETFs) with expense ratios of 0.10% or less
No built-in option to shift to more conservative investments over time
No withdrawals permitted before age 18

Potential Planning Opportunity at Age 18

Before age 18, the focus of Trump accounts is investment growth. Once the account beneficiary attains age 18, the account converts to a Traditional IRA, and there may be an opportunity for additional planning.

Under current rules, a potential planning strategy is to consider full or partial Roth conversions when the account turns into a Traditional IRA. The thought being at age 18, most account beneficiaries will be in the lowest tax brackets of their lives; making the years around the account switching to a Traditional IRA the most opportune time for an account beneficiary to convert the funds. If current laws remain intact, an 18-year-old that converts an amount lower than the then standard deduction ($16,100 in 2026) may owe no income tax at the time of conversion.

While ordinary income taxes may be due on the conversion, future growth in Roth IRAs are income tax-advantaged during the beneficiaries’ lifetime. Assuming the Roth IRA rules don’t change, allowing for multiple decades of compounding, income tax-advantaged growth could turn the account into a significant, tax-advantaged nest egg. (See our March 2026 Insight that illustrated a $49,500 Roth account at age 18 growing at 6% for decades).

Tax Considerations

Are Trump Account contributions tax-deductible?

No. Individual contributions are made with after-tax dollars. Separately, employer contributions are not taxable to the child.

How are distributions taxed?

Contributions are not taxed again when withdrawn
Earnings, employer contributions, and government contributions are taxed as ordinary income
After the IRA transition, withdrawals before age 59½ may be subject to a 10% penalty unless an exception applies

IMPORTANT:

*Do contributions CURRENTLY qualify for the annual gift tax exclusion?

As of today, IRS guidance here is limited. Early interpretations suggest contributions to Trump accounts do not qualify as “present interest gifts,” meaning gifting to these accounts would use lifetime exemption and require gift tax reporting. This could change before year end, so stay tuned if you choose to make contributions before further guidance is issued by the Treasury.

Coordinating with Roth IRAs

These accounts do not replace Roth IRAs. Once a child has earned income, a custodial Roth IRA can also be funded (up to the lesser of earned income or $7,500 annually). Both strategies can be used together to enhance long-term tax-efficient savings. For additional guidance, see our article on funding custodial Roth IRAs: Pay Your Kids (Legally) and Jumpstart Their Retirement with a Roth IRA.

Multiple Goals; Multiple Accounts?

An additional consideration is to fund multiple child savings accounts for different goals. For example: Fund 529s for education-related goals, UTMAs/UGMAs, and direct gifts for early lifetime goals, and Roth IRAs and/or Trump accounts for long-term goals.

Below find a comparison chart of the different features of each account type:

Option	Key Features	Tax Treatment	Contribution Rules	Advantages	Disadvantages
Direct Gifts	Assets or cash given directly; no account required; can include securities or cash.	Not deductible; earnings taxed to the child; may trigger gift tax if over annual exclusion.	$19,000 annual exclusion per recipient in 2026.	Simple and flexible; immediate use by recipient.	No control after gift; assets become child’s property; may affect financial aid.
UGMAs / UTMAs	Custodial account managed by an adult until the minor reaches the age of majority (18–21 depending on the state).	Earnings subject to “kiddie tax”; first portion at child’s rate, excess at parent’s.	No contribution limits; gifts are irrevocable.	Simple way to transfer assets; flexible investment options.	Assets belong to child at majority; limited tax efficiency.
Custodial Roth IRAs	Roth IRA for minors with earned income; managed by custodian until age of majority.	Contributions after-tax; qualified withdrawals tax-advantaged; allows 529 plan rollovers (lifetime $35k limit).	Limited to the lesser of earned income or annual limit: $7,500 in 2026.	Tax-advantaged growth; powerful long-term retirement and asset-building tool.	Requires child to have earned income; retirement-focused.
Trump Accounts	Established by OBBBA (July 2025); government-backed and active beginning July 4, 2026.	Tax-deferred growth; after age 18, follows traditional IRA rules (taxed as ordinary income).	$5,000 annual limit; one-time $1,000 federal seed for children born 2025–2028.	“Free” money for newborns; matching contributions often offered by employers.	Does not qualify as “present interest gift”; no withdrawals before age 18; assigned custodian at launch.
529 Plans	State-sponsored plans designed specifically for education savings.	Earnings and qualified education withdrawals are tax-advantaged.	Limits vary by state; superfunding allows multiple years of gifts at once.	Tax-advantaged growth; high limits; Roth IRA rollover option for accounts 15+ years old.	Non-qualified withdrawals subject to tax and penalty.

As always, consider speaking to your advisors before taking action!

References:

taxesforexpats.com – Trump Account Age 18 Withdrawal Rules

trumpaccounts.gov – Official Trump Accounts Website

https://www.schwab.com/learn/story/trump-accounts

AICPA Podcast – Trump Accounts are Coming – and You Need to be Ready

ACTEC Podcast – Trump Accounts (IRC §530A): Estate, Tax, and Wealth Planning Considerations

MARKET BACKDROP

ASSET CLASS SUMMARY
As of 5/18/2026

Asset Class	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
U.S. Stock	+3.26%	+7.09%	+8.26%	+24.93%	+21.86%	+12.78%	+15.12%
Global Ex U.S.	+0.01%	+1.11%	+10.37%	+30.07%	+18.68%	+8.85%	+10.12%
U.S. Bond	-1.54%	-1.85%	-0.72%	+4.43%	+3.68%	+0.06%	+1.63%
Global Bond	-1.72%	-2.38%	-0.80%	+2.99%	+3.15%	-1.74%	+0.58%
U.S. Real Estate	-1.96%	+1.53%	+8.39%	+8.74%	+10.23%	+3.76%	+6.25%

SECTOR SUMMARY
As of 5/18/2026

Cyclical	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
Consumer Cyclical	-1.42%	+4.61%	+0.42%	+11.63%	+18.23%	+8.20%	+13.32%
Financials	-1.35%	-1.11%	-5.03%	+1.83%	+18.48%	+8.64%	+12.80%
Materials	-3.68%	-5.08%	+10.30%	+17.31%	+10.59%	+4.74%	+10.38%
Real Estate¹	-1.81%	+1.81%	+9.97%	+9.09%	+10.70%	+4.51%	+7.19%

Sensitive	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
Comm. Services	+5.02%	+14.73%	+11.67%	+46.09%	+35.13%	+16.28%	+14.00%
Energy	+10.01%	+10.68%	+35.95%	+46.75%	+19.03%	+22.59%	+10.58%
Industrials	-1.60%	-2.20%	+10.40%	+20.48%	+21.39%	+12.44%	+13.67%
Technology	+10.69%	+20.31%	+16.10%	+44.60%	+34.32%	+23.85%	+26.40%

Defensive	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
Consumer Defensive	+5.00%	+0.15%	+13.67%	+10.46%	+10.03%	+8.88%	+9.17%
Health Care	-2.08%	-7.23%	-5.47%	+11.47%	+5.50%	+5.17%	+9.62%
Utilities	-4.83%	-3.01%	+3.63%	+9.88%	+13.40%	+9.43%	+9.83%

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Consumer Cyclical (S&P 500 Consumer Discretionary (Sector) Total Return), Financials (S&P 500 Financials (Sector) Total Return), Materials (S&P 500 Materials (Sector) Total Return), Real Estate (S&P 500 Real Estate (Sector) Total Return¹), Comm. Services (S&P 500 Communication Services (Sector) Total Return), Energy (S&P 500 Energy (Sector) Total Return), Industrials (S&P 500 Industrials (Sector) Total Return), Technology (S&P 500 Information Technology (Sector) Total Return), Consumer Defensive (S&P 500 Consumer Staples (Sector) Total Return), Health Care (S&P 500 Health Care (Sector) Total Return), Utilities (S&P 500 Utilities (Sector) Total Return).

1) The index Launch Date is Sep 19, 2016. All information for an index prior to its Launch Date is hypothetical back-tested, not actual performance, based on the index methodology in effect on the Launch Date. Back-tested performance reflects application of an index methodology and selection of index constituents with the benefit of hindsight and knowledge of factors that may have positively affected its performance, cannot account for all financial risk that may affect results and may be considered to reflect survivor/look ahead bias. Actual returns may differ significantly from, and be lower than, back-tested returns. Past performance is not an indication or guarantee of future results. This back-tested data may have been created using a “Backward Data Assumption”. For more information on “Backward Data Assumption” and back-testing in general, please see the Performance Disclosure.

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The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website. When you access one of these websites, you are leaving our web site and assume total responsibility and risk for your use of the websites you are linking to.

Dated Material

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