Many American families are trying to balance two priorities: saving for their kids’ college and their own retirement. With the introduction of Trump Accounts in July 2026, there’s a new investment account option created especially for children. Alongside 529 plans, Roth IRAs, and custodial accounts, parents are weighing which option — or combination — makes the most sense.
Understanding the Accounts
Trump Accounts are long-term retirement accounts available to children under 18, designed for long-term retirement savings, not necessarily educational spending. Eligible children born between 2025 and 2028 can elect to receive a $1,000 contribution from the U.S. Department of the Treasury. For older children, you can fund the account with up to $5,000 in annual contributions from sources such as family, friends, and employers.
529 plans are tax-advantaged accounts built primarily for education expenses, including college, graduate school, and, in many states, K-12 private school tuition. Contributions grow tax-free, which means investment gains are not taxed when used for qualified education costs.
Roth IRAs allow children to contribute money they earned, such as from a job, babysitting, or a side hustle, up to the annual IRS contribution limit. Contributions are after-tax, meaning that growth and withdrawals are tax-free.
Custodial Accounts (UGMA/UTMA) are flexible investment or gifting accounts opened by an adult as custodian to manage for the benefit of a child. There are no restrictions on how the money is eventually used, but the child gains full legal control of the assets at the age of termination.
Choosing the Right Account
The right account depends on whether you’re saving for your child’s education or retirement and how much flexibility and control you need. Sometimes you’ll want more than one account. Starting early can help in different ways, depending on the goal. For education savings, more time may give 529 contributions a longer runway before tuition bills arrive.
Original reporting: KRDO (Colorado Springs metro) — read the source article.
