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Financial planners say Trump Accounts could give children a new way to build tax-free retirement savings through Roth IRAs, creating what one tax attorney described as a “legal backdoor” that was previously unavailable to most minors.

In a CNBC report published Wednesday, Adam Bergman, founder of IRA Financial, said the structure of Trump Accounts allows children to begin building retirement assets even without earned income, a requirement that normally prevents most minors from contributing to a Roth IRA.

“Trump Accounts create a legal backdoor into a Roth IRA that does not require a child to have earned income, something that was simply not possible before,” Bergman said.

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Trump Accounts, also known as 530A accounts, are tax-advantaged investment accounts for children created under President Donald Trump‘s One Big Beautiful Bill Act. Eligible children can receive a $1,000 government-funded contribution, while families, employers and other contributors can add money over time.

Roth Opportunity

Bergman said Trump Accounts could become especially valuable because some assets may later be converted into a Roth IRA. Since many beneficiaries would likely make the conversion early in their careers, when their income and tax rates are relatively low, the tax cost could be limited.

Ben Henry-Moreland of Kitces.com said a successful conversion could allow the funds to continue growing tax-free for decades. He said the strategy has the potential to create a significant pool of tax-free retirement savings over time.

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Tax Risks

The strategy also carries tax risks. Cary Sinnett, senior manager of personal financial planning at the Association of International Certified Professional Accountants, told CNBC that the “kiddie tax” is the largest technical risk associated with the approach. Under certain circumstances, unearned income can be taxed at a parent’s rate rather than the child’s, particularly for younger beneficiaries and some dependent students.

The discussion comes as Trump Accounts begin rolling out nationwide. Treasury Secretary Scott Bessent said last week that nearly 6 million children had already signed up for the program.

ARK Invest CEO Cathie Wood has also endorsed the initiative, saying it could help children participate in long-term wealth creation tied to technological growth.

Investment activity and government-funded seed deposits are expected to begin around July 4, according to Treasury officials.

Image via Shutterstock

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