By Rabbi Fishel Todd, Esq.
Menahal of Yeshiva Pirchei Shoshanim

A new federal savings and investment program for American children is drawing attention from parents, grandparents and financial planners across the country. Known as Trump Accounts, the program is designed to give children a financial head start by investing money in their names from an early age.

For Orthodox Jewish families, many of whom are raising large families while managing the significant costs of tuition, summer camps, weddings and helping children establish their own households, this program deserves attention. Although Trump Accounts will not eliminate the financial challenges facing our community, they may provide an additional opportunity to build long-term assets for our children.

Here is what parents and grandparents should know.

What Are Trump Accounts?

Trump Accounts are tax-advantaged investment accounts established under federal law as part of the Working Families Tax Cuts legislation enacted on July 4, 2025. The initiative was promoted by President Donald J. Trump, with support from business leaders, including Michael Dell.

Unlike a traditional savings account that earns a fixed interest rate, a Trump Account is designed for long-term investing. During the child’s initial growth period, the money is invested in eligible mutual funds or exchange-traded funds that track broad American stock market indexes.

The goal is to give children an opportunity to benefit from long-term investment growth and the power of compounding.

Who Is Eligible, and What Money Is Available?

There are several important distinctions families should understand.

1. The $1,000 federal contribution

Children who are U.S. citizens, have a valid Social Security number, and were born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 contribution from the U.S. Treasury, subject to the program’s requirements and election procedures.

This is a one-time contribution, not an annual payment. Families should make sure that the required election has been completed so that an eligible child can receive it.

2. The additional $250 contribution

Michael and Susan Dell announced a major philanthropic commitment intended to provide $250 contributions to Trump Accounts for eligible children. This is not a universal $250 payment to every American child. Eligibility for this additional contribution depends on the applicable program criteria, including qualifying ZIP codes and other designated groups.

Families should check the official website to determine whether their children qualify.

3. Children under 18

The program is not limited to newborns. Eligible children under age 18 with valid Social Security numbers may have Trump Accounts established for them, subject to the applicable rules. Recent federal implementation efforts have expanded access through automatic account creation, but parents should verify that each child’s account has been established and that any benefits requiring a separate election have been claimed.

For families with several children, it is particularly important to check each child individually. Eligibility for the account itself does not necessarily mean eligibility for every special contribution.

Can Parents, Grandparents and Others Contribute?

Yes. One of the most useful features of the program is that contributions are not limited to parents.

Subject to the program’s rules, money may be contributed by parents, grandparents, relatives, friends and other eligible donors. Employers and qualifying charitable or governmental programs may also make contributions under separate provisions.

Ordinary contributions from family members and other private donors are generally subject to an aggregate annual limit of $5,000 per child during the applicable growth period. Certain qualifying government and charitable contributions are treated differently, and qualifying employer contributions have their own rules within the applicable limits.

For Orthodox Jewish families, this could create several opportunities.

A grandparent who wants to help a grandchild establish a financial foundation might consider contributing to the child’s account. Parents could make contributions as part of a long-term family savings plan. Other relatives might choose to contribute as a meaningful gift in honor of a child’s birth or another milestone.

Instead of purchasing another toy or gift that may soon be forgotten, a relative could consider a contribution that has the potential to grow over many years.

Donors should check the current rules before contributing, particularly if they are making gifts to multiple children or have questions about gift-tax reporting.

Why Starting Early Can Make a Difference

The central idea behind Trump Accounts is the power of compounding: investment earnings can generate additional earnings over time.

Consider a hypothetical example. If $1,000 were invested for a child and earned an average annual return of 7% for 18 years, it would grow to approximately $3,380 before fees, taxes and inflation.

This is only an illustration, not a prediction or guarantee. Stock market investments can lose value, and actual returns will vary.

Now consider what might happen if parents or grandparents made additional contributions over the years. Depending on the amounts contributed, the investment performance and the applicable rules, the account could eventually provide a more substantial financial resource.

The lesson is straightforward: time can be a powerful asset. Even relatively modest contributions made early in a child’s life may have decades to grow.

What Does This Mean for Orthodox Jewish Families?

Our community understands the importance of planning for the future. Parents work hard to provide their children with a strong Torah education, and families often begin thinking years in advance about the costs of chinuch, weddings and helping children become financially established.

Trump Accounts may become one additional component of that planning.

However, families should understand what these accounts are—and what they are not.

These accounts are not a substitute for tuition savings. Money in a Trump Account is subject to special rules during the child’s growth period, and it is not designed to function as an ordinary bank account from which parents can freely withdraw funds for current expenses.

Parents who are saving for yeshiva tuition, seminary, camp or other expenses that arise before a child reaches adulthood should continue to consider savings vehicles designed for those needs.

A Trump Account may serve a different purpose: providing a longer-term financial foundation for the child as he or she enters adulthood.

For a family with many children, it may be worthwhile to look at each child’s financial future as part of an overall household plan rather than viewing each account in isolation.

What About Yeshiva Tuition, Weddings and Helping Children Get Started?

One question parents will naturally ask is whether the money can be used to help with the major expenses that arise when a child grows up.

The answer requires careful planning.

Trump Accounts are structured as a special type of traditional individual retirement account, or IRA. During the initial growth period, special restrictions apply. Once the child reaches the relevant age and the account transitions to the ordinary IRA rules, withdrawals generally become subject to the tax treatment and restrictions applicable to traditional IRAs.

Consequently, parents should not assume that money can be withdrawn tax-free at age 18 to pay tuition, wedding expenses, rent or a down payment on a home. The tax consequences depend on the circumstances, and an ordinary withdrawal is not automatically tax-free simply because the beneficiary is young.

For families who anticipate needing money for educational expenses, a 529 education savings plan may offer advantages that a Trump Account does not. Other savings arrangements may be more suitable for shorter-term needs.

The right approach will depend on the family’s circumstances, financial resources and objectives.

A Word About Chinuch and Financial Responsibility

Beyond the financial considerations, there may be an opportunity to teach children an important lesson about money.

Our mesorah places great value on achrayus, planning ahead and using the resources entrusted to us wisely. Parents can use the existence of a long-term investment account as an opportunity, when appropriate, to explain the difference between spending and saving, between short-term needs and long-term goals, and between a financial asset and immediately available cash.

These are valuable lessons regardless of the size of the account.

At the same time, parents should remember that the account belongs to the child and is subject to the program’s legal requirements. It should not be presented as a source of money that the family can freely use whenever an expense arises.

Important Considerations Before Enrolling

Before opening, claiming or funding a Trump Account, families should keep several points in mind:

Verify eligibility. Confirm that each child meets the requirements for an account and for any special government or philanthropic contribution.
Understand the investment risk. Stock market investments can fluctuate substantially. There is no guaranteed rate of return.
Review the tax rules. Contributions, employer benefits and future withdrawals may have different tax consequences. Consult a qualified tax professional when needed.
Compare savings options. A Trump Account may complement, rather than replace, a 529 plan, ordinary savings or other long-term financial arrangements.
Consider religious investment requirements. Families who require investments to comply with halachic standards should investigate the available investment options carefully. The program’s eligible funds and investment restrictions may limit the choices available, so a knowledgeable rav and qualified financial professional should be consulted where appropriate.

That last point deserves particular attention in our community. A family should not assume that an investment automatically meets its halachic standards simply because it is offered through a government-sponsored program.

How Can Parents Get Started?

The official government website is:

https://TrumpAccounts.gov

Parents and guardians can use the official website and its associated resources to learn about account eligibility, enrollment, claiming available contributions and managing an account.

The IRS also provides information about the program and the relevant election procedures. Families should follow the current instructions rather than relying on social media posts or informal summaries.

Because the program is new and implementation details continue to develop, it is wise to verify the latest requirements before taking action.

The Bottom Line

Trump Accounts represent a new opportunity for eligible American children to begin building long-term investments at an early age. For Orthodox Jewish families, the program may be worth considering as one part of a broader strategy for helping children enter adulthood with a financial foundation.

The most important first step is to check eligibility, confirm whether any government or philanthropic contributions are available, and understand the rules governing the money.

No single account will solve the financial challenges facing families today. But thoughtful planning, informed decisions and a commitment to preparing the next generation can make a meaningful difference over time.

As with any financial decision, families should consult qualified professionals regarding their individual circumstances and should not rely on this article as personalized tax, investment or halachic advice.