August Financial Planning Corner: Your Child or Grandchild's First $1,000?
Quote of the Month
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Warren Buffett
Yes, Mr. Buffett is making another appearance. I know….I'm a Buffett nerd, but a quote about planting trees fits pretty well when we are talking about an investment account for a child who may have decades to let that first dollar grow. I'm not talking about a small shrub here, I'm talking about a magnificent oak!
Most editions of the Financial Planning Corner are written with retirees in mind. This one is for our younger clients and the growing families in their lives. For our seasoned clients, consider this an easy email to forward to your children or grandchildren who are starting families of their own.
The goal is simple. Make sure no eligible child misses out on money that is available to them.
Trump Accounts Are Officially Live
Back in January, I wrote that if the government seed money became real, you should open the account and take it.
Well, it is real.
Trump Accounts officially launched on July 4, 2026. The app is live, contributions can be made, and eligible children can now receive a one-time $1,000 contribution from the U.S. Treasury.
I still believe 529 plans, custodial accounts, and Roth IRAs all have important roles. Nothing about this launch changes that.
But financial planning does not have to turn into a contest where only one account can win. If $1,000 is available for your child, claim it. Then decide where the next dollar should go.
Who Qualifies for the $1,000?
There are two separate eligibility rules:
A Trump Account can generally be opened for a child with a valid Social Security number before the calendar year in which the child turns 18.
The one-time $1,000 Treasury contribution is limited to a child who is a U.S. citizen, has a valid Social Security number, and was born between January 1, 2025 and December 31, 2028.
The person requesting the $1,000 must also expect the child to be their qualifying child for tax purposes in the year the election is made. In most cases, that means a parent should handle the election.
For now, forward this email to the parents and make sure the setup gets completed.
The Five-Step Checklist
1. Get the Child’s Social Security Number
The child must have a valid Social Security number before the Trump Account election can be submitted.
2. Submit IRS Form 4547
IRS Form 4547 is the election used to open the account and request the $1,000 contribution.
You can submit it in any of the following ways:
Through the official Trump Accounts app or website.
Through your IRS Individual Online Account.
With your federal income tax return.
Quick tip, have a government issued photo ID ready. The online process requires identity verification and may ask for a photo of your ID and a live selfie.
3. Make Sure You Request Both Pieces
Form 4547 contains one election to open the Trump Account and a separate election to request the $1,000 contribution.
Make sure you complete both!
The $1,000 is not deposited merely because a child was born during the eligible window. Someone must make the election on the child’s behalf.
4. Watch for the Activation Notice
After the IRS processes the election, the responsible parent or authorized individual should receive an email from no-reply@trumpaccounts.treasury.gov with instructions to activate the account.
Use the same legal names, dates of birth and Social Security numbers that were entered on Form 4547. Small mismatches can create delays.
5. Activate the Account and Let Treasury Fund It
Once the account is activated and eligibility is confirmed, the $1,000 Treasury contribution will be deposited automatically.
There is no cost to open the account, and you do not have to contribute your own money to receive the $1,000. Get the account open, get it activated, and get the seed money invested.
What Happens After the $1,000 Arrives?
At launch, contributions are automatically invested in SPYM, a low-cost exchange traded fund that tracks the S&P 500.
Remember, your own contributions are not tax-deductible. The account grows tax-deferred, distributions are generally restricted during the growth period, and traditional IRA rules generally take over starting January 1 of the year the child turns 18.
A Pretty Cool 2026 Side Note
Children born in the United States between July 2 and December 31, 2026 may receive a limited edition Social Security card featuring the official Freedom 250 logo in black ink.
Is it financially valuable? No.
Is it still pretty cool? Absolutely!
And yes, I may be taking a very personal interest in whether one of those cards shows up in my own mailbox. More to come….
Final Thought
We spend a lot of time helping families protect and grow their hard-earned money. Part of that job is making sure they also collect every dollar available to them.
Take the free money. Get it invested. Then we can have the more detailed conversation about what comes next.
If this does not apply directly to you, forward it to someone whose family is growing. A simple email may be the difference between a child receiving the seed money and leaving it on the table.
As always, if you want help deciding how a Trump Account should fit alongside a 529, custodial account or the rest of your family’s plan, give me a shout. I am happy to dive in.
One last note - if you're looking to have a conversation one on one with me to talk through what your retirement picture looks like you can find my calendar here.
Yours In Planning!
Pat Kalish, CFP®
