More than 6 million children have been enrolled in Trump Accounts as of mid-June, according to the U.S. Department of the Treasury. Yet that figure represents only a fraction of the 73.1 million Americans under 18, based on 2024 Census Bureau data, signaling a significant participation gap as the program approaches its July 4 launch for private contributions.
The accounts, created under the One Big Beautiful Bill Act (OBBBA) signed last July, allow parents, guardians, employers, and charitable organizations to contribute up to $5,000 annually to tax-deferred investment accounts in a child's name. Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens are eligible for a one-time $1,000 seed contribution from the Treasury.
Among the 6 million-plus enrollees, roughly 1.4 million qualify for the seed money, representing only about 39% of eligible children, per Treasury data reported by CNBC. While 86% of accounts opened are linked to families earning less than $200,000 annually, approximately 95% of U.S. households with children under 18 fall below that threshold, suggesting an overrepresentation of higher-income families among early adopters.
Madeline Brown, senior policy associate at the Urban Institute, highlighted the program's opt-in structure as a core barrier. "The question leading into July is whether low-income families are in the group who have signed up or the larger group that hasn't," she told CNBC. Adam Michel, director of tax policy studies at the Cato Institute, warned that reliance on opting in will lead to "a system used primarily by those best equipped to navigate it."
Trump Accounts function as a hybrid between a traditional IRA and a custodial account. During the growth period—from account establishment through December 31 of the year before the beneficiary turns 18—contributions are restricted to eligible index funds of primarily U.S. companies, distributions are generally prohibited, and no deduction is available. Employers can contribute up to $2,500 per employee annually, counting toward the $5,000 cap, while contributions from state and local governments, tribal governments, and qualifying nonprofits do not count against the limit.
Major companies including JPMorgan Chase, Intel, Steak 'n Shake, Robinhood, and Schwab have pledged to match the Treasury's $1,000 contribution for employees' children born between 2025 and 2028. Based on modeling by the Schwab Center for Financial Research, an account receiving the seed plus maximum annual parental contributions could grow to approximately $191,000 by age 18 and potentially more than $2.2 million by age 60, assuming a 6% annual growth rate.
The U.S. Department of Labor's Employee Benefits Security Administration recently issued guidance confirming that Trump Accounts and related employer contribution programs will generally not constitute "employee pension benefit plans" subject to Title I of ERISA. The agency concluded this because accounts are established for dependents, not employees, and employers exercise no meaningful control over administration or investments. Acting Secretary of Labor Keith E. Sonderling said the guidance should provide clarity for employers as the administration rolls out the accounts.
However, the technical release noted an edge case where an employee—rather than a dependent—is the account beneficiary, such as a 16- or 17-year-old worker. In those cases, employer contributions will not create an ERISA plan provided participation is completely voluntary and the employer does not control investments or restrict fund use beyond what the tax code requires.
Advisors should note that the program's reliance on opt-in enrollment and financial literacy may exacerbate wealth gaps. For lower-income families, the complexity of pre-tax and after-tax dollars—where pre-tax funds are subject to ordinary income taxes at withdrawal and a 10% penalty if taken before age 59½—could further dampen participation. As the July 4 launch approaches, advisors may want to discuss ABLE accounts as an alternative for clients with special-needs beneficiaries, or explore tax-aware portfolio strategies to optimize after-tax outcomes.
