It turns out the newest buy-and-hold investors still need diaper changing.

Seven million children have already been enrolled in Trump accounts that are designed to give young Americans an early stake in public markets. The accounts, which are seeded $1,000 if the child is born between 2025 and 2028, invest in low-cost index funds and ETFs and are locked until age 18. Yet despite rapid adoption, the wealth management industry remains split. Some see them as an essential gateway to capital markets, while others consider them a lesser alternative to existing options.

“Trump Accounts are training wheels for a lifetime of investing,” said Aaron Schumm, founder of savings platform Vestwell. “A child who grows up with one arrives at their first job in a totally different position than someone opening their first 401(k) at age 24.”

Born to Buy and Hold

Around 50 major employers, mostly Wall Street institutions and Big Tech firms, have already begun contributing to employees’ kids’ accounts. With standard 401(k) plans now table stakes, these contributions help companies stand out. “Every employer is always asking ‘How can I help my employees save for their future?’” Schumm told Retirement Upside. “The more robust your benefits package is, the more attractive it is to work at your company.”

Still, because the accounts launched less than a month ago, wealth managers urge caution, advising clients to claim the free $1,000 seed money but prioritize other vehicles first. “If a client has funded their retirement and a 529 plan, and they have extra money, then Trump Accounts could be another option for tax-deferred growth,” said Daniele Griffith, director of tax operations at April. However, she warned that investment choices are overly restrictive and heavily skewed toward US large-cap equities, omitting international stocks or individual holdings.

Then comes the issue of financial maturity:

• If parents contribute $5,000 annually, a Trump Account could swell to nearly $200,000 by the time their kid turns 18.
• Early withdrawals trigger steep penalties, and young adults need to be responsible enough to recognize that.

“You might say, ‘Use that to buy a house or go to college.’ But Junior might say, ‘No, I’m going to live in Fiji for a few years,’” Griffith told Retirement Upside.

Growing Pains. While she expects the sign-up process to be streamlined and simplified over time, Griffith said almost all of her clients have had trouble registering their children for the accounts, which required filling out an IRS form that could be submitted along with their most recent tax returns. “They’re receiving letters saying they had incomplete information on their tax return and they’re being asked to submit additional information,” she said. “Maybe it’s just because the program is new, but there do seem to be administrative gaps.”

Who said bipartisanship is dead?

Senator Bernie Moreno, a pro-business Republican from Ohio known for his focus on border security and economic deregulation, and Senator Elizabeth Warren, a Democrat from Massachusetts who advocates for progressive economic and social policies, don’t agree on much. They’re in lockstep, however, in their belief that Congress must act now to fix Social Security’s shaky finances. To that end, the strange bedfellows have put forward a new proposal to lift the Social Security tax wage cap, set at $184,500 for 2026. Lifting the cap would mean income above that level would be taxed at the normal rate, raising significant additional revenues for the program while spreading the pain of higher taxes across more income earners.

Having these two lawmakers, who have substantial political differences, come forward with a serious proposal for shoring up Social Security’s finances is a big deal, according to Kathleen Romig at the Center on Budget and Policy Priorities. “We haven’t seen a Republican officeholder put forward a serious plan to improve solvency since Sam Johnson did so in 2016,” she told Retirement Upside. “In that sense, it’s very encouraging to see this bipartisan proposal.”

A Sensible Strategy

Rather than tackle the entire solvency problem in one go, Warren and Moreno have proposed taking a big first step by lifting the Social Security wage cap, which would roughly halve the long-term funding shortfall. They argue that a piecemeal approach, while not perfect, could encourage additional public conversation and genuine political debate about how to save Social Security from big benefit cuts.

The proposal has no “donut hole,” noted Chuck Marr, vice president for federal tax policy at the CBPP, meaning it wouldn’t exempt earnings between the current cap and a new floor from Social Security taxes. Prior proposals have suggested capping at the standard limit and restarting the Social Security tax on any income above $400,000.

“We’re not a fan of donut hole policies or the idea that only billionaires should be taxed to fix the program,” Marr said. “There’s certainly plenty of money from billionaires that should be raised, but you need to raise revenue more broadly than that.”

As Romig and Marr noted, there’s precedent and support for this approach:

• In 1994, policymakers eliminated the Medicare tax wage cap, which was once set at the same level as Social Security’s.
• Polling routinely finds that removing or raising the earnings cap is the single most strongly favored policy option among Americans looking to shore up fund financing, per the National Institute on Retirement Security.

Bipartisanship Is Key. For all intents and purposes, bipartisanship will be essential in any real Social Security funding solution. “Back in 1983, Republicans and Democrats held hands and jumped off the cliff together,” Romig said. “With the rules being what they are in the Senate, they’ll have to do so again.”

It’s still better to give than receive, even though giving to charities has grown more complicated lately.

Some big new rules set by the One Big Beautiful Bill Act officially kicked in this year, including a charitable deduction floor for itemizers and reduced benefits for high-income donors. The policy changes are just one reason why advisors are fielding more questions than ever about the best way to structure gifts as part of the overall estate planning strategy, especially about donor-advised funds, thanks to their “give now, decide later” flexibility that lets clients move assets off the balance sheet without having to immediately deploy them to a charity. That interest has helped DAF assets grow to top $328 billion, according to IRS data, and all signs are that giving via DAFs will accelerate further as knowledge of the vehicle grows among advisors and clients alike.

“Advisors who want to work with high-net-worth, and definitely ultra-high-net-worth, clients need to have competency in philanthropic planning,” said Paul Caspersen, a program director at the American College of Financial Services. “Donor-advised funds are an important tool in the estate planning context, but they also involve highly complex planning considerations.”

A Tool for the Moment

Under the One Big Beautiful Bill Act, itemizers can only deduct charitable contributions that exceed 0.5% of their adjusted gross income, effectively making smaller, ad-hoc annual gifts less tax-efficient. Because of this floor, clients may want to consider consolidating multiple years of planned charitable contributions into a single large gift that helps clear the floor and maximizes tax savings.

The DAF vehicle is attractive in this environment because bunching doesn’t mean clients have to stop supporting their favorite charities annually, Caspersen explained. Instead, bunching qualifies the taxpayer for an immediate tax deduction in the year of their contribution, and they can then recommend grants to qualified nonprofits over time.

While most will find DAFs helpful in the estate planning process for charitably minded clients, it’s critical for advisors to know (and follow) the law when funding them, Caspersen warned. Some considerations include:

• Contributions are fully irrevocable, and though the client can request the DAF sponsor take certain actions, there’s no legal guarantee of follow-through.
• Clients cannot receive more than incidental benefits in return for contributions, and they cannot use funds to fulfill legally binding personal pledges.
• Likewise, clients cannot fund a DAF directly using a qualified charitable distribution from an individual retirement account.

Back to School. This is just scratching the surface of what advisors need to know about DAFs. That’s why the American College is launching a DAF-focused certification this fall to complement its existing wealth management curriculum, which also includes the Chartered Advisor in Philanthropy designation, according to Caspersen. “We believe this is the perfect time for this program,” he said.