$5,000 is the 2026 annual limit on ordinary family and Section 128 employer contributions combined to a Trump Account; the $1,000 federal seed and qualified general contributions are exempt from that limit. No contribution can enter before 4 July 2026. The account is a type of traditional IRA from the outset, with a special growth period before its usual IRA rules apply.
IRS Form 4547 instructions say the child owns the account. During the growth period, permitted investments are qualifying broad US equity index funds. Ordinary spending withdrawals are restricted, but the law permits specific distributions: full transfers to another Trump Account, qualified ABLE rollovers at age 17, excess-contribution corrections, and distributions on the child's death.
Maya's contribution and growth scenario
Maya's parents put $4,000 at each year-end for 18 years and her employer contributes $1,000 per year under an eligible plan. Assume the $1,000 seed arrives at birth and the fund earns a hypothetical 7.5% annually with no fees, tax or inflation adjustment. The future value is $5,000 × [(1.075^18 − 1) / 0.075] + $1,000 × 1.075^18 = about $182,063 at age 18. If no more money enters and the same return continues for 47 years, the nominal age-65 figure is about $5.45 million. These are illustrations, not expected returns.
The tax and access distinction
Family after-tax contributions generally create basis; the seed, eligible employer contributions and growth do not. Distributions after the growth period follow traditional-IRA rules, with basis handled pro rata under the normal IRA rules. From 1 January of the calendar year in which the child turns 18, ordinary IRA distribution rules generally apply; an early distribution may face tax and a 10% additional tax unless an exception applies. See the IRS notice before treating the account as interchangeable with a 529 or Roth IRA. FAFSA treatment needs account-specific Federal Student Aid guidance; do not assume a 20% student-asset assessment solely because the child owns this IRA.
