Trump accounts might just be a way to get millions into Roth IRAs for your kids.

If the latest guidance ends up being how these accounts work, there could be a significant tax planning opportunity.

Normally, getting meaningful amounts into an IRA is difficult because contributions generally require earned income.

Trump Accounts may create a different path.

Based on the current guidance, on January 1 of the year the beneficiary turns 18, the account is expected to transition into a traditional IRA. If that remains the final rule, Roth conversions could begin immediately.

That timing is ideal because many people have relatively little taxable income between ages 18 and 22, creating an opportunity to convert at much lower tax rates than they’ll likely face later in life.

Here’s an example.

Assume the child receives:

• The $1,000 government seed contribution

• $5,000 annual contributions during the first two years

• Inflation-adjusted annual contributions for the following 16 years (assuming 2.5% inflation)

• An 8% annual investment return

By age 18, the account could grow to roughly $238,000.

If that balance is converted to a Roth IRA over the next four to five years, you could end up with approximately $324,000 inside a Roth IRA by age 22.

For very wealthy families, there may be additional planning opportunities.

One possibility is simply having parents or grandparents pay the conversion taxes so the child can maximize the amount that ultimately reaches the Roth.

Another strategy we’ve discussed is having the child own an interest in a Family LLC or Family Limited Partnershipthat receives ordinary deductions from tax-aware investments. If structured appropriately, those deductions could potentially offset some of the taxable income created by the Roth conversions.

Assuming the Roth continues compounding at 8% annually and no withdrawals are taken, the account could grow to approximately:

• Age 30: $600,000

• Age 40: $1.29 million

• Age 50: $2.79 million

• Age 60: $6.02 million

There’s another feature that makes this especially interesting.

Under the normal Roth IRA conversion rules, each conversion amount generally becomes available for withdrawal without the 10% early withdrawal penalty after its own five-year waiting period.

So if you converted roughly $50,000 per year for five years, you’d gradually create a staggered liquidity schedule:

• Five years after the first conversion: about $50,000 of principal becomes available.

• One year later: roughly $100,000.

• Then $150,000, and so on until the entire converted principal has satisfied its respective five-year waiting periods.

That means the account can continue compounding tax-free while still providing increasing flexibility well before age 59½ if funds are ever needed.

I don’t think this was the primary policy objective behind Trump Accounts, but if the final regulations ultimately follow the current guidance, this is probably how affluent families are going to use them.

That said, I doubt the world looks the same in 18 years.

The way young adults build careers, earn income, and pursue education may look completely different by then. College may not resemble what it does today, AI could reshape career paths, and tax laws will almost certainly evolve.

So I’d view this strategy as a framework that will likely need to be adjusted as both the rules and the world change.