Here’s how Trump Accounts could affect women’s retirement savings gap

Trump accounts — set to officially launch July 4 — are aimed at helping the youngest Americans get an early start on building long-term financial security through investing. Whether that will reduce the retirement savings gap that women face is less certain, experts say.

Research shows that although women save more of their paycheck than men, their 401(k) account values are lower. The average balance among men at the end of 2025 was $194,597, compared with $146,476 for women, according to Vanguard’s new 2026 How America Saves report.

This is at least partly due to earning less on average — 81 cents for every $1 earned by men, per the Labor Department — and spending more time out of the labor force due to family caregiving, experts say. Three in five caregivers are women, according to a 2025 report from AARP and the National Alliance for Caregiving, a nonprofit advocacy and research group.

“While Trump Accounts provide early access to investing and the benefits of compounding, it wouldn’t solve [the problems] that are driving the gender gap in retirement balances,” said Anqi Chen, associate director of savings and household finance at the Center for Retirement Research at Boston College.

At the same time, there may be an indirect positive impact on women’s retirement savings, said Teresa Ghilarducci, an economics professor at The New School in New York.

This is because “when children have real assets of their own, families face less pressure to solve every crisis out of the mother’s paycheck, debt or future retirement,” Ghilarducci said.  

As of mid-June, more than 6 million children have been signed up for Trump Accounts, also known as 530A accounts.

After the July 4 launch, parents, guardians, grandparents and others will be able to contribute up to $5,000 annually in after-tax dollars until the year before the beneficiary reaches age 18. Babies born between 2025 and 2028 with a Trump Account will get a $1,000 initial deposit from the Treasury Department.

Employers also are permitted to contribute up to $2,500 per worker each year, which is part of the $5,000 contribution limit. Additionally, qualifying charitable organizations, as well as state and local governments, can make contributions that don’t count toward the annual cap.

While Trump accounts might help create long-term savings among children in general, they may not eliminate the headwinds that girls can face in childhood when it comes to parents’ investments in their future. A 2017 report from T. Rowe Price found that among parents with only boys, 50% had set aside funds for their kids’ college compared with 39% of parents with only girls. 

Parents of boys also were more likely to cover the entire cost of college than parents of girls — 17% vs. 8% — and less likely to consider sending their male children to a less expensive college to avoid taking on loans, according to the report. They also were more willing to prioritize saving for their boys’ college tab over their own retirement, the T. Rowe Price research found.

With Trump accounts, the $1,000 seed money available to newborns regardless of gender shows that “each child deserves an asset,” Ghilarducci said. “But family patterns may return after that … a public seed cannot erase private bias.”

Meanwhile, parents with children who have savings may be less likely to try solving emergencies at the expense of their own nest egg.

“In family life, [a retirement account] can become an emergency fund for children, parents, spouses and households,” Ghilarducci said.

Among focus group participants for 2019 research from retirement services provider TIAA and the Massachusetts Institute of Technology’s AgeLab, women in particular described “the struggle of sacrificing their own financial security in retirement in order to put their children’s education and wellbeing first,” the study reads.

How children will end up using the money put away on their behalf remains to be seen. While Trump Accounts have different rules from individual retirement accounts, the rules that govern traditional IRAs will generally apply once the beneficiary reaches age 18.

This would mean that ordinary tax rates would apply to withdrawals — unless the money had already been taxed when contributed — and that excluding some exceptions, withdrawals made before the beneficiary reaches age 59½ would be subject to a 10% early withdrawal penalty, according to a June report from the Congressional Research Service.

Those exceptions include higher education expenses, up to $10,000 to purchase a first home, $5,000 for birth or adoption of a child, $1,000 annually for personal emergencies, medical expenses that qualify for a tax deduction and health insurance premiums while unemployed.