By Anne McCabe & Atricia Roberts
Every year, high-earning families hand over more of their hard-earned income to taxes than necessary simply because they aren't sure which savings vehicles offer maximum tax efficiency. With back-to-school deadlines looming and a brand-new tax law introducing Trump Accounts alongside upgraded 529 plans, decision fatigue is setting in. You want to give your children or grandchildren a massive financial head start, but you don't want to lock your wealth into the wrong account or trigger a surprise tax bill down the road.
So let's walk through both accounts in plain language, so you can decide the best fit for your family.
What Is a Trump Account?
A Trump Account is a new, tax-deferred savings account for children, created under the 2025 tax law. Here are the basics as they stand for 2026. Eligible children under 18 can have one. For U.S. citizen children born between 2025 and 2028, the federal government seeds the account with a one-time $1,000 contribution. Families can add up to $5,000 a year, and in some cases an employer can contribute up to $2,500. The money is invested in low-cost index funds that track U.S. companies, and it grows tax deferred.
There are some strings attached. Withdrawals generally are not allowed until the child turns 18. After that, the account works much like a traditional IRA, including a 10 percent penalty on early withdrawals that are not used for qualified purposes such as education or a first home. The trade-off is on taxes: contributions are not deductible, and the earnings are eventually taxed as ordinary income. In other words, the growth is tax-deferred, not tax-free.
How 529 Plans Work, and What Just Changed
The 529 plan has been around for years, and it just got more useful. It’s built specifically for education. Your contributions grow tax deferred, and withdrawals for qualified education expenses come out completely tax-free at the federal level. Many states, though not all, also offer a state tax deduction or credit when you contribute to your state-specific plan.
A few 2026 updates:
The annual gift tax exclusion rose to $19,000 per person, or $38,000 for a married couple.
Superfunding still lets you front-load five years of gifts at once, up to $95,000 per child on your own or $190,000 as a couple, without touching your lifetime exemption. For families focused on estate planning, that is a significant lever.
The amount you can withdraw for K-12 tuition doubled to $20,000 per year.
529s now cover more than college, including certain professional credentials, certifications, and registered apprenticeship programs.
And thanks to a newer rule, up to $35,000 of leftover 529 money can eventually be converted to a Roth IRA for the beneficiary, as long as the account has been open at least 15 years and other conditions are met.
529 Plans vs. Trump Accounts at a Glance
Feature | 529 Plan | Trump Account |
Primary purpose | Education savings (K-12, college, and now certain credentials) | General long-term savings for a child |
Growth | Tax-free for qualified education expenses | Tax-deferred, taxed later as ordinary income |
Annual contribution room | Large, up to $95,000 ($190,000 per couple) via superfunding | Up to $5,000 a year |
Starting boost | None | One-time $1,000 federal seed for eligible children born 2025 to 2028 |
Investments | Broad menu of portfolios | Low-cost U.S. index funds only |
Well suited for | Families saving specifically for education | Families who want flexible savings or a head start for a newborn |
Which One Makes Sense for Your Family?
For most of the families we sit down with, the answer is that these accounts are not really competitors. They are built for different jobs.
If your main goal is education, the 529 is usually the stronger tool. The growth can come out tax-free, and the contribution room is far larger. That matters when you are a high earner funding private school, college, or graduate school and you would rather not create a surprise tax bill along the way.
If you want to give a child a flexible financial head start that is not tied to school, the Trump Account has real appeal, especially the free $1,000 the government adds for eligible children born through 2028. Some of the families we work with plan to use both: a 529 as the education engine, and a Trump Account as a smaller, longer-term supplement.
A Few Things to Keep in Mind
A couple of caveats, because the details matter. Both accounts involve investing, which means their value can rise and fall with the markets. Trump Account rules are still being finalized, so some specifics may shift as federal guidance comes out. And the right move really does depend on your full picture: your income, your state's tax rules, your estate plan, and what you want this money to do down the road.
This is exactly the kind of decision where a second set of eyes can help you avoid an expensive misstep. We talk through real questions like this one on our podcast, Living Richly with Curo, where we discuss the financial decisions women and families face. If college planning is on your mind this fall, it’s a good listen.
Let's Talk About Your Plan
Curo Private Wealth is a women-led planning firm serving clients in Rockville, MD, Reston, VA, and across the country. Our approach to holistic financial planning looks at your whole life, not just your investments, and it is built for women in transition and first-generation wealth builders alike. To start a conversation, get in touch, call (301) 652-9677, or email info@curoprivatewealth.com.
Frequently Asked Questions
What is a Trump Account?
A Trump Account is a new tax-deferred savings account for children born between 2025-2028, created under the 2025 federal tax law. Eligible children can receive a one-time $1,000 government contribution, and families can add up to $5,000 a year, invested in low-cost U.S. index funds until the child turns 18.
Can I have both a 529 plan and a Trump Account for my child?
In most cases, yes. Many families use a 529 plan for education savings and a Trump Account as a flexible, general-purpose supplement. The right mix depends on your goals and your overall financial plan.
Which is better for college savings, a 529 or a Trump Account?
For education specifically, a 529 plan is often the stronger choice, because qualified withdrawals for school can come out tax-free and the contribution limits are much higher. Your situation may differ, so it is worth reviewing with an advisor.
How much can I contribute to a 529 plan in 2026?
You can gift up to $19,000 per beneficiary in 2026 ($38,000 for a married couple) without gift tax reporting. Through superfunding, you can front-load up to $95,000 as an individual or $190,000 as a couple per child at once.
Do Trump Accounts come with any free money?
Yes. For U.S. citizen children born between 2025 and 2028, the federal government adds a one-time $1,000 contribution to start the account.
About Atricia
Atricia Roberts is Chief Operating Officer and Partner at Curo, where she serves as lead advisor for Rockville clients and helps guide the firm’s growth and operations. With more than 15 years in financial services, Atricia is passionate about delivering human-centered financial planning and expanding access to comprehensive education for underserved communities. As a black female financial advisor and a member of the Association of African American Financial Advisors (Quad-A), she is dedicated to increasing the presence and success of Black professionals in the industry. A CFP® professional, she focuses on helping clients align their finances with their life goals. To learn more about Atricia, connect with her on LinkedIn.
About Anne
Anne McCabe is Chief Executive Officer and Partner of Curo Private Wealth, where she sets the firm’s vision and leads its advisory practice. With more than two decades in the industry, Anne’s career began on Wall Street before evolving into a mission to build a firm rooted in purpose, integrity, and values-driven advice. A CFP® professional, she is widely recognized for her leadership, mentorship, and commitment to lifelong learning. To learn more about Anne, connect with her on LinkedIn.
This article is for educational purposes only and is not intended as tax, legal, or investment advice. All investing involves risk, including the potential loss of principal. Rules for Trump accounts and 529 plans are subject to change, and the strategies described may not be appropriate for every situation. Please consult a qualified professional about your specific circumstances.