Is the $1,000 Government Seed Money for Trump Accounts Worth Claiming?

<p>There's a new government benefit for children born in 2025 or later. I'm talking about the Trump Accounts that were established in last year's One Big Beautiful Bill Act.</p>
<p>These are tax-advantaged savings accounts for children under 18, though only children who are U.S. citizens are eligible. If your child was born in 2025 or later, they're also eligible for a $1,000 government-seeded contribution to the account.</p>
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<p>Is this benefit legitimate and worth claiming? Absolutely!</p>
<p>Despite the name, the initial investment into your child's account comes not from the president, but from the American people. It's basically a tax-advantaged <a href="https://www.fool.com/retirement/plans/ira/?utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=320ff367-3ac4-4db0-a788-6d268c766ae4">individual retirement account (IRA)</a> designed specifically for children. If you pay federal income taxes, you, too, are funding these accounts, so you should help your child claim their share.</p>
<h2>Opening an account and claiming the seed investment couldn't be easier</h2>
<p>How do new parents go about claiming the money? It's easy. You just need to gather a bit of information:</p>
<ul>
<li> <p class="yf-1fy9kyt">Your child's date of birth</p></li>
<li> <p class="yf-1fy9kyt">Your contact information</p></li>
<li> <p class="yf-1fy9kyt">Social Security numbers for you and your child</p></li>
</ul>
<p>Then pull up <a href="https://form.trumpaccounts.gov/">Form 4547</a> and fill in the form with that information. It's very simple and straightforward, so those who hate paperwork (like I do) don't need to be anxious about it. In addition, you can add multiple children on the same web page. It's all done online, so there's no printing out forms or faxing.</p>
<p>After that, you'll be contacted by a trustee with whom your Trump Account will be established. They will provide further instructions about how to complete the account setup.</p>
<p>Once you've successfully opened the account, you (as a parent), other adults, or employers can contribute up to a combined $5,000 a year per child in 2026 and 2027. Those funds will be invested by the trustee in relatively safe index funds, like those that track the entire <a href="https://www.fool.com/investing/stock-market/indexes/sp-500/?utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=320ff367-3ac4-4db0-a788-6d268c766ae4">S&amp;P 500 index</a> of large-cap U.S.-listed companies.</p>
<p>Your child can withdraw funds from the account once they turn 18, though the same contribution and withdrawal rules that govern traditional IRAs apply to these accounts.</p>
<p>This is money every new parent can and should claim. It will help your child enter adulthood with a bit more financial security -- and perhaps even some early knowledge about saving and investing.</p>