The Invisible Inheritance: Trump Accounts, Roth IRAs, and the New Rules of Generational Wealth IN 2026
The hardest financial skill is getting the goalpost to stop moving.
We’ve had a recurring conversation with clients that goes something like this:
"I grew up differently than this. My parents didn’t talk about money. We were middle class, and I took out loans for school because I didn't understand what that debt meant for my future. I spent decades grinding to get here."
Then they look around at their beautiful home and their comfortable life, and they say:
"I want my kids to have a different life. I want them to be empowered. I want them to have a safety net. But I am terrified that because they haven't seen the struggle, they won't develop the grit. I’m scared they will think this life just... happens."
This is the Paradox of Plenty. Most of our clients have successfully jumped economic stratas. You have built a level of wealth your parents couldn’t have imagined. You want to give your children the result of your success (security, lack of student debt) without depriving them of the cause of your success (drive, work ethic, and the understanding that money is a finite resource).
The uncomfortable truth is that you can’t manufacture struggle. Fake hardship is just theater, and kids see right through it. If you pretend money is scarce when they can see it isn't, you aren't teaching them grit; you're teaching them dishonesty.
Instead of trying to hide the wealth, the goal is to teach them how to carry it. We need to shift the focus from 'surviving' (which is what many of us learned) to 'stewarding' (which is what they need to learn). At Mana, we believe that stewarding requires a specific set of mental models and a very specific set of accounts.
Part I: The Psychology of the Future
Explaining the definition of a stock takes five minutes. Calibrating a child’s moral compass to handle the weight of wealth takes eighteen years (or more). If we want to raise 'gritty' children in a comfortable world, we have to look past the spreadsheets and focus on the behaviors that drive them.
Wealth is What You Don’t See
We live in an Instagram economy. Your children will grow up seeing "rich" everywhere: fancy cars, influencers on yachts, friends with the latest tech.
We need to teach them a concept famously coined by Morgan Housel: Wealth is what you don’t see. It is the cars not purchased. The diamonds not bought. The renovations postponed. It is income not spent.
The person driving a $100,000 car might be wealthy, or they might just have $100,000 less wealth than they did before they bought the car. Or worse, they might be in $100,000 of debt. Teach your children that looking wealthy is the fastest way to become poor. True wealth is the invisible portfolio that gives you the freedom to say "no" to a job you hate or "yes" to an opportunity that inspires you.
The Dignity of Work (and the Magic of “Enough”)
The fear we hear most often from parents is simple: "What if my children grow up believing that work isn't required to live a good life?"
This is why transparency is key. You want to help them realize that if their expectations rise in lockstep with their income, they will never be free; they'll just be running faster on a more expensive treadmill.
To help teach this, here is one idea we’ve learned from personal finance legend Vicki Robin.
She suggests shifting the conversation from "cost in dollars" to "cost in life energy." The next time your child wants a $100 pair of sneakers or a new gadget, try helping them translate that price tag into hours of effort.
"That item costs ten hours of yard work. Is it worth ten hours of your Saturday?"
When a child views a purchase not as a deduction from a bank account, but as a trade for their own time and freedom, the definition of "enough" can become much clearer.
Gratitude is an Action
You cannot lecture a child into gratitude. You have to practice it.
We are big fans of the classic "Three Jars" system for allowance: Spend, Save, Give.
The "Give" jar is about more than just charity; it is a behavioral hack. When a child physically sets aside money for someone else, it breaks the default mental loop that "money equals stuff for me." It proves to them (even at age seven) that they have enough to be generous. That is a powerful mindset to grow up with.
Part II: The Tactical Roadmap (2026 Edition)
Philosophy builds the mindset, but tactics build the safety net.
Back in 2023, we wrote about how to Make Your Child a Millionaire. The core principles remain, but the rules of the game have changed for the better. As we look at the financial landscape of 2026, here is the updated blueprint for building your family’s financial legacy while teaching the value of a dollar.
Strategy A: The "Millionaire" Trick (Custodial Roth IRA)
This remains our favorite strategy because it solves the "grit" problem and the "wealth" problem simultaneously.
The Strategy: You employ your child in your family business. This isn't an allowance; it is legitimate employment.
The Job: Modeling (photos for your business website), office cleaning, sorting mail, social media management.
The Lesson: They have to do the work. They learn that money is exchanged for value provided, not just for existing.
The Payoff: Because they have "earned income," they can contribute to a Roth IRA.
The 2026 Update: For 2026, the Roth IRA contribution limit has risen to $7,500.
Let’s look at the math. If you pay your child $7,500 a year for legitimate work and contribute that entire amount to a Custodial Roth IRA from age 8 to 18:
Total contributions: $82,500.
At a 7% annual return, by the time they are 18, the account is worth roughly $118,000.
The Kicker: If they never contribute another dime and just let it sit until age 65, that account could grow to over $2.8 million (Hypothetical example for illustrative purposes only. Assumes a 7% annual rate of return compounded monthly and does not reflect actual investment results, taxes, or fees. A lower rate of return would result in a lower final balance. The Roth IRA contribution limit is subject to change.).
That is $2.8 million of tax-free money. You have given them a retirement safety net, but more importantly, you have given them a front-row seat to the magic of compound interest.
Strategy B: The Education Fund (with a Safety Valve)
Many of our clients still carry the mental scars of their own student loans. They want to ensure their children graduate debt-free. But the cost of college is the elephant in the room. In 2026, the average total cost for four years at a private university is pushing well past $300,000.
For years, parents have hesitated to over-fund 529 plans. "What if my child doesn't go to college? What if they get a scholarship? Is that money trapped?"
Thanks to the SECURE 2.0 Act, the "trapped money" fear is largely gone. We now have the 529-to-Roth IRA Rollover.
Here are the new rules you need to know for 2026:
You can roll over up to $35,000 (lifetime limit per beneficiary) of unused 529 funds into a Roth IRA for that beneficiary.
The 529 account must have been open for at least 15 years. (This is why you open the account the day they are born, even with just $50).
You cannot move the whole $35,000 at once. You are limited to the annual Roth IRA contribution limit ($7,500 in 2026). It would take about 5 years to move the full $35,000.
The child needs earned income in the year of the rollover (see Strategy A).
This changes the psychology of saving for college. You can aggressively fund the 529 plan knowing that if your child is a genius who gets a full ride, or an entrepreneur who skips college to start a business, the money isn't wasted. It becomes a retirement jumpstart.
Strategy C: The "Trump Account"
If Strategies A and B are about your discipline, Strategy C is about seizing opportunity.
As of July 2025, the One Big Beautiful Bill Act (OBBBA) introduced a new player to the game: the Trump Account (officially the Section 530A Account).
Regardless of your politics, the math here is undeniable. This is effectively a "Baby 401(k)" that offers something no other account does: seed capital from the government. Morgan Housel often notes that the hardest part of compounding is getting the first snowflake to stick. This account hands your child the snowflake.
Who Qualifies?
The "Seed Money" Group: Any U.S. citizen child born between Jan 1, 2025 – Dec 31, 2028 is eligible for an automatic $1,000 federal deposit.
The "Catch-Up" Group: Thanks to a $6.25 billion donation from the Michael & Susan Dell Foundation, children under age 10 (born before 2025) in qualifying zip codes may be eligible for a $250 seed deposit. To get an idea of whether your child could qualify, you can enter your zip code into the site Census Reporter and find your area's median income based on data from the Census Bureau.
The General Group: Any U.S. child under age 18 with a Social Security Number can have an account.
The Rules:
Contribution Limit: The total limit is $5,000 per year (combined from all sources).
The "Business Owner" Hack: Under the new IRS Section 128, employers can contribute up to $2,500 per year to an employee's child's account. This is tax-free to the employee. (If you own your own business, this is a no-brainer way to move corporate cash to your family tax-efficiently).
Investments: Funds are restricted by law to low-cost U.S. Equity Index Funds (like the S&P 500). No crypto, no stock picking, no leverage.
The Lock-Up: The money is generally locked until age 18. After that, it functions like a Traditional IRA (tax-deferred growth, taxable withdrawals).
How to Open One:
File IRS Form 4547: You do not need to wait for the website. You can register your child now by filing Form 4547 with your 2025 tax return. This "claims" the $1,000 seed money.
Wait for the "Go" Signal (July 4, 2026): The Treasury will begin accepting private contributions on Independence Day, 2026.
Use the Portal: Manage the account at trumpaccounts.gov. Eventually, you will be able to roll these funds over to private custodians (like Fidelity or Schwab), but for the initial launch, they are held by Treasury-designated trustees.
It’s hard to teach a child about the stock market when they have no skin in the game. These accounts - whether it's the Trump Account or the Custodial Roth IRA - change that. They give you a tangible prop to put on the kitchen table. When you can show a ten-year-old that they own a tiny slice of the companies they see every day—Disney, Apple, McDonald’s—finance stops being a boring lecture and starts being relevant to their world.
Part III: The Legacy You Leave
You can wire transfer millions of dollars in a single afternoon. Transferring the competence to handle that money takes a lifetime.
We often associate "Mana Moments" - those instances where you realize what it’s all for - with the big finish lines: the retirement party, the sale of the business, the dream vacation. But the most consequential Mana Moment of your life might be a quiet Tuesday evening at the kitchen table, showing your 15-year-old the compounding curve of their Roth IRA, and watching the realization light up their eyes.
You are giving them a safety net, yes. But by forcing them to participate in the process - by making them earn the income, manage the buckets, and understand the strategy - you are ensuring they have the character to handle the safety net.
The Mana Action Plan for 2026:
File IRS Form 4547 immediately with your 2025 taxes for any child under age 18 (to register them) and especially for newborns (to lock in the $1,000 seed money).
Open the 529 Plan if you haven’t. Remember, the 529-to-Roth IRA Rollover can only be used after 15 years.
Look for legitimate ways to hire your children. Document it. Pay them. Teach them that work equals reward.
Max out the Roth IRA ($7,500). Even if they spend their "earned income" on teenage things, you can gift them the cash to fund the Roth (as long as the contribution doesn't exceed their earned income).
Talk about money. Share your wins, your losses, and your history. Remove the mystery.
As Morgan Housel wrote, "History is a study of change, irony, and surprises." We cannot predict what the economy of 2050 will look like. But we can predict that discipline, patience, and a strong work ethic will always be valuable currencies.
Let’s build that legacy together.
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Stephanie Bucko and Cristina Livadary are fee-only financial planners based in Los Angeles, California. Stephanie is the Chief Investment Officer and Cristina is the Chief Executive Officer at Mana Financial Life Design (FLD). Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. As fee-only fiduciaries and independent financial advisors, Stephanie and Cristina never receive commission of any kind. Stephanie and Cristina are legally bound by their certifications to provide unbiased and trustworthy financial advice.