Interactive tool
Every child born from 2025 through 2028 is eligible for a $1,000 federal deposit into a Trump account, and it isn't automatic: the account has to be opened to claim it. The harder question is where your own dollars for a child should go next. Pick what the money is for, set your assumptions, and compare all three accounts after tax.
A framing note: this tool puts the same contributions into each account and models federal taxes only. Florida has no state income tax, so for Florida families this is the whole tax picture. If you live elsewhere, see "What else to weigh" below.
Built by Jesse Plunkett, CEPA, CRPC · Last reviewed July 11, 2026 · Verify on 
The federal bracket your child expects in the year the money comes out. This taxes the growth in a Trump account, and in a 529 when the money doesn't go to education. Students and young adults usually sit at 10% or 12%, and a year with very little income can come out at 0% if total income stays under the standard deduction.
The federal long-term capital gains rate on the custodial account. A young adult with modest income often qualifies for 0%. While the kiddie tax applies, gains above a small yearly threshold are taxed at the parents' rate instead.
This is an educational illustration based on the assumptions you enter, not tax advice or a recommendation. Trump accounts are new and some rules are still being finalized. Talk to your CPA and your advisor before choosing an account. Every calculation happens right here in your browser; nothing you enter is sent anywhere or stored.
If your child was born between January 1, 2025 and December 31, 2028, they are eligible for a $1,000 federal deposit into a Trump account. It isn't automatic; you claim it by opening the account. Some employers can also contribute, within a separate federal limit, without that amount landing in your taxable income. Free dollars are worth having even in an account with awkward tax treatment on the way out.
The question this page is built for starts after that. When you have your own money to contribute for a child, does it belong in a Trump account, a 529 plan, or a plain investment account in the child's name (a UTMA)? The answer turns almost entirely on what the money ends up paying for, which is why the tool above starts with that question.
All three accounts start with money you've already paid tax on. What separates them is how the growth gets taxed on the way out, and that depends on what the money is used for.
A 529 plan grows tax-free as long as withdrawals pay for education: college, and a widening list that now includes trade credentials, apprenticeships, and some K-12 costs. If the money goes anywhere else, the growth is taxed as ordinary income plus a 10% penalty.
A custodial account (UTMA) is a regular investment account owned by the child. Nothing special happens going in or coming out. When shares are sold, the growth is taxed at capital gains rates, which sit below ordinary income rates and can be 0% for a young adult with modest income.
A Trump account behaves like a traditional IRA that starts at birth. Your deposits go in after tax, up to an annual limit set by federal law. Everything above your own deposits, meaning the $1,000 seed, any employer money, and all of the growth, is taxed as ordinary income when it comes out. The account is locked until the year the child turns 18, and withdrawals before age 59½ generally add a 10% penalty. Education waives the penalty on the full amount; a first home waives it on up to $10,000.
The chart shows each account at the age you choose, split into what stays in your child's pocket and what goes to federal tax and penalties.
A 529 plan usually wins when the money pays for education, because those withdrawals skip federal tax entirely. A custodial account usually wins for a first home or an unknown goal, thanks to capital gains rates and the absence of penalties. A Trump account is strongest when the money stays put for retirement.
| If the money is for | How the tax treatment lands | Why |
|---|---|---|
| College at 18 | 529 plan | Qualified education withdrawals pay no federal tax at all. The other two accounts both owe tax on their growth, and the gap compounds with the balance. |
| A first home in their 30s | Custodial (UTMA) | Growth is taxed at capital gains rates, often 0% or 15% for a young adult, with no penalty and no purpose test. A 529 used for a house pays ordinary income tax plus 10% on growth; a Trump account pays ordinary income tax and keeps its penalty on most of the withdrawal. |
| Retirement | Trump account | Decades of tax deferral finally get room to compound, and after 59½ the penalty is gone. Converting to a Roth IRA during the child's low-income years can improve the outcome further. |
| Not sure yet | Custodial (UTMA) | It is the only one of the three with no strings attached: no purpose test, no penalty, and no lock-up beyond the age of majority. |
None of these are absolutes. Change the tax rates and the winner can flip, which is exactly what the sliders above are for.
The sliders answer one narrow question: given your assumptions, which account leaves more after federal tax. An actual account decision has more moving parts than that. Here's what the tool can't see.
Trump account deposits are subject to an annual limit set by federal law, and that limit is shared across everyone who gives: parents, grandparents, and an employer's contribution all count against the same ceiling. A 529 or custodial account can accept far more in a single day.
This page models federal tax only, which is the complete picture in Florida. Elsewhere, many states offer a state deduction or credit for 529 contributions, and some states have signaled they will tax Trump account earnings annually rather than honor the federal deferral. If you live in one of those seven, the Trump account's case weakens considerably.
A parent-owned 529 is treated as a parent asset on the FAFSA and assessed at no more than 5.64%. A custodial account belongs to the student and is assessed at 20%, the harshest treatment of the three. How the FAFSA will treat Trump accounts is not settled yet, so don't let aid strategy hang on that account until it is.
With a 529, you stay in control indefinitely and can move the money to a sibling. A custodial account becomes the child's outright at the age of majority, which Florida lets you set anywhere from 21 to 25. A Trump account is the child's from the start and becomes theirs to command at 18. Handing a five-figure account to an eighteen-year-old is a behavioral question as much as a tax one, and it deserves as much thought as the tax math.
The Trump account's best case runs through a conversion. After the child turns 18, the account can be converted to a Roth IRA, ideally during low-income student years, with the conversion tax paid from outside the account. Growth after that point comes out tax-free in retirement. It can be a powerful play, but it depends on disciplined execution decades from now, and this tool doesn't model it.
If college doesn't happen, a 529 isn't stranded. You can change the beneficiary to another family member, and up to $35,000 can be rolled into the child's own Roth IRA over time, provided the account is at least 15 years old and the child has earned income. That softens the overfunding fear, though it won't rescue a large unused balance. Like the Trump account's Roth conversion, this rollover sits outside the tool's math; neither account gets credit for its escape hatch.
While a child is young, investment income in a custodial account above a small yearly threshold is taxed at the parents' rates instead of the child's. Families who use custodial accounts well tend to realize gains gradually, staying under the threshold in low-income years, rather than selling everything at once.
Trump accounts were created in July 2025, and as of July 2026 the IRS is still operating on interim guidance, with final rules on distributions and reporting yet to come. The comparison on this page reflects the rules as they stand today. Expect details to move, and revisit the decision when they do.
The tool leaves the $1,000 seed and any employer dollars out of the math on purpose: they arrive in the Trump account no matter where your own contribution goes, so they can't change that decision. It also assumes deposits that stay invested with no dividends along the way. In practice a custodial account pays some tax on dividends each year, which means the tool slightly flatters it over long horizons; returns vary, fees differ by account and state, and financial aid interacts with all of it. The direction of the comparison tends to hold; the exact dollar amounts won't.
The $1,000 federal deposit exists only if the account is opened; it isn't automatic. Whether your own contributions belong there is a separate question that turns on the goal. Education tends to favor a 529, flexibility favors a custodial account, and retirement favors the Trump account.
A children's savings account created by federal law in July 2025 that behaves like a traditional IRA starting at birth. Deposits go in after tax and are subject to an annual limit set by federal law. Growth is taxed as ordinary income on the way out, and the account stays locked until the year the child turns 18.
Usually not. Qualified 529 withdrawals for education pay no federal tax at all, while everything in a Trump account beyond your own deposits comes out as ordinary income. For money that's genuinely headed to college, the 529's tax-free exit is hard to beat. The Trump account's strength is retirement, not tuition.
No. They cover different goals rather than competing for the same one. A 529 plan still grows tax-free for education, which a Trump account can't match since its growth comes out as ordinary income. The two work well together: the 529 handles the education years, and the Trump account picks up afterward, mainly as a head start on retirement.
Children born between January 1, 2025 and December 31, 2028. It isn't automatic; you claim it by opening a Trump account for the child. Separately, some employers can contribute for an employee's child, within a separate federal limit, without that amount landing in the employee's taxable income.
Almost always. Everything is handled virtually, so where you live is rarely a barrier. The only exception is a handful of states where I'm not registered yet, and if that's you, I'll tell you on our first call.
Yes. It's free to link to and free to embed on your own site using the code in the "Cite or embed" section below. Please keep the attribution and disclosure lines in place.
A quick, useful starting point
1. What happens if the plan changes If college doesn’t happen, a 529 isn’t stranded. Up to $35,000 can move into the child’s own Roth IRA, though the conditions attached decide whether that’s an escape hatch…
The sliders can't see your state, your financial aid picture, your employer's plan, or the rest of your balance sheet. A short call can cover all of that.
Writers, teachers, and other advisors are welcome to reference this tool or place it on their own page. Both options below keep the calculator with its assumptions, its disclosures, and a link back here, which is what makes it useful to a reader who lands on it somewhere else.
Plunkett, Jesse. “Trump Account vs. 529 vs. UTMA Calculator.” True Stewards Advisory, https://truestewards.com/trump-account-vs-529-vs-utma. Accessed [date].
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