1 in 3 Parents Wrongly Believe Trump Account Withdrawals Are Tax-Free at 18

Trump Accounts launched with a bold promise: a $1,000 federal deposit to help American children build long-term savings from birth. But a new government savings program is only as effective as the public's understanding of it. To find out how well that understanding actually holds up, we surveyed 1,004 U.S. parents about their awareness, confidence, and factual knowledge of how Trump Accounts really work.

What we found is a program that has achieved broad name recognition but not broad comprehension, and in several cases, that gap in understanding could carry real financial consequences for the families it's meant to help. Throughout this report, we reference our free Trump Accounts Calculator, which lets parents model realistic growth scenarios rather than rely on the assumptions this survey shows so many are getting wrong.

79% of parents say they've heard of Trump Accounts. That's a strong number for a program that's still new. But awareness and understanding are two very different things.

Only 7% of parents describe themselves as "very confident" in their understanding of how Trump Accounts work. Nearly half (49%) rate their understanding as a 1 or 2 out of 5.

Confidence varies sharply by how close a family is to the program. Parents expecting or raising a child in the 2025-2026 cohort are far more confident than everyone else: 37% of them rate their understanding a 4 or 5, compared to just 20% of parents with kids born 2016-2024 and 23% of parents with kids born 2009-2015. Awareness follows a similar pattern: 90% of new/expecting parents have heard of the program, versus 76% and 79% for older cohorts, respectively.

Awareness hasn't translated into action for most families. Across the full sample, 78% of parents haven't started the process of opening an account, while just 12% have fully opened one, and 10% have started but not finished.

That national picture hides a dramatic split by proximity to eligibility. Among new and expecting parents, the group whose children qualify for the $1,000 deposit, 58% have taken action: 36% have fully opened an account, and another 22% have started the process. Among parents of older children, that combined engagement rate drops to just 13%-14%.

Younger parents are also more proactive across the board: 28% of parents aged 18-29 have started or finished the process, compared to just 12% of parents aged 46-61.

This engagement gap isn't unique to our sample. Independent reporting has found that only a fraction of the roughly 73 million eligible U.S. children have been signed up so far, and that lower-income families are consistently more likely to miss out on the program altogether (3), a pattern that lines up closely with the income-based gaps we found in both action taken and factual understanding.

Among parents who haven't started, the two most common reasons are practical, not political:

Comprehension and eligibility confusion together account for more inaction than distrust or political branding combined. That confusion isn't limited to parents, either; the IRS itself only opened its official reporting form for these accounts to public comment this year, underscoring how new and still-evolving the program's paperwork really is (1).

Parents who selected "Other" were invited to explain in their own words. Their answers cluster into three distinct groups, each represented here:

Each of these concerns points to a different kind of barrier: ideological, structural, logistical, and financial, and each shows up often enough in the data to matter.

To measure actual comprehension rather than self-reported confidence, we tested parents on nine true/false statements covering eligibility rules, investment structure, contribution rules, and withdrawal restrictions, then combined the results into a Composite Literacy Index (0%-100%).

No group scores above a basic passing grade. Even the best-performing segment, new and expecting parents, averages under 50%.

No group scores above a basic passing grade. Even the best-performing segment, new and expecting parents, averages under 50%.

A few individual findings stand out:

• The automatic-deposit myth: Only 32% of parents correctly know that the $1,000 deposit requires a parent to actively file for it and isn't automatic. 42% of new/expecting parents, the group most likely to qualify, wrongly assume it happens on its own.
• The investment-risk blind spot: Just 39% of parents realize that the funds are invested in the market and could lose value, like stocks. 14% believe the balance is a guaranteed, fixed amount.
• The age-18 tax-free myth: Only 19% of parents correctly know that turning 18 does not make withdrawals tax-free for any purpose. 30% believe the money becomes an unrestricted, tax-free windfall at adulthood, while 51% aren't sure either way.

Beyond the federal deposit, we asked parents how much of their own money they plan to contribute annually. Household income strongly predicts both the amount and the likelihood of contributing at all (p < 0.001).

Lower-income households are more likely to contribute smaller amounts: 16% of families earning under $50K plan to contribute "Under $500," compared to just 2% of households earning over $200K. But higher earners are, somewhat counterintuitively, more likely to say they don't plan to contribute anything at all, 46% of the $150K-$200K bracket versus 31% of the under-$50K bracket, likely reflecting greater access to alternative savings vehicles like 529 plans and brokerage accounts.

Among parents who do plan to contribute their own money, 31% say it would come from funds they'd otherwise put into a standard savings account, and 16% say it would come from money they'd otherwise invest elsewhere.

We asked parents directly: how well has the government explained how Trump Accounts actually work?

Nationally, 58% of parents say the program was explained "not well" or "not at all," while only 27% rate the explanation positively.

That dissatisfaction grows the further a family is from the program's launch. Among new/expecting parents, 46% say the program was explained "somewhat" or "very" well. Among parents of children born 2009-2015, that figure drops to just 19%, while negative sentiment climbs from 44% among new parents to 67% among this older cohort.

Given how many of the misconceptions in this report are about numbers — what the account is actually worth, whether it can lose value, what happens at withdrawal — one practical fix is a tool that lets parents test those numbers themselves rather than relying on assumptions.

Omni Calculator's free Trump Accounts Calculator lets parents enter their child's age, starting deposit, and planned annual contributions, then see projected growth under three return scenarios: optimistic, conservative, and pessimistic, rather than a single best-case number. Users can also toggle in average inflation to see what the account will realistically be worth in today's dollars, and the tool's guide walks through exactly the kind of eligibility and withdrawal rules this survey found most parents get wrong, and compares Trump Accounts with other savings programs like 529 plans, so parents can see how the two options stack up before deciding where to put their money.

With only 39% of parents realizing the funds are market-invested and could lose value, and only 19% understanding the real tax treatment at age 18, a tool that models realistic outcomes rather than optimistic ones may help close some of the gap this report has measured.

Trump Accounts have achieved something many new government programs never do: most Americans have heard of them. But this report shows that awareness has sharply outpaced understanding. Parents overwhelmingly underestimate how much action the program actually requires from them, misjudge basic facts about investment risk, and, most consequentially, are more likely than not to be wrong or unsure about how the money will be taxed when their child turns 18.

The pattern throughout this data is consistent: proximity to the program breeds literacy. New and expecting parents, who are actively navigating enrollment, understand the rules far better than parents of older children who received a one-time announcement and little follow-up. That suggests the comprehension gap could be a communication problem that closes naturally as families engage directly with the program, and one that tools built to explain the real numbers can help close faster.

Data is derived from a national survey of 1,004 U.S. parents evaluating awareness, confidence, and factual understanding of "Trump Accounts." The Composite Literacy Index compiles aggregate factual accuracy scores across nine true/false questions covering program eligibility, investment structure, contribution rules, and withdrawal restrictions. Statistical significance was assessed using Chi-Square Tests of Independence for categorical variables and Kruskal-Wallis Tests for ordinal variables. Some cross-tabulated findings are directional trends that did not reach the p < 0.05 significance threshold and are noted as such in context. Given the number of demographic comparisons tested, some associations may reflect chance variation rather than a true underlying effect. Percentages throughout this report are rounded to the nearest whole number (or nearest hundredth for index scores); as a result, some totals may sum to slightly above or below 100%.

Dawid Suida
Finance Expert