How Trump Accounts Could Impact Women’s Retirement Savings Gap

Trump’s account, scheduled to officially launch on July 4, aims to help America’s youngest generation get an early start on building long-term financial security through investing. Experts say it’s less certain that it will narrow the retirement savings gap women face.

Research shows that even though women save more from their paychecks than men, their 401(k) accounts are worth less. According to Vanguard’s new 2026 How America Saves report, men had an average balance of $194,597 at the end of 2025, compared to $146,476 for women.

Experts say this is at least partly due to lower average incomes (81 cents for every dollar earned by men, according to the Department of Labor) and more time spent away from the workforce to care for family members. Three out of five caregivers are women, according to a 2025 report from AARP and the nonprofit advocacy and research group National Alliance for Caregiving.

“Trump accounts offer early access to investments and the benefits of compound interest, but they won’t solve the (problems) that are driving the gender disparity in retirement savings,” said Anki Chen, associate director of savings and household finance at Boston University’s Center for Retirement Research.

At the same time, Teresa Ghilarducci, an economics professor at the New School in New York, said it could have an indirect positive impact on women’s retirement savings.

That’s because “when children have real assets of their own, families are under less pressure to solve every crisis from their mother’s salary, debts, future retirement savings, etc.,” Ghilarducci said.

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

Starting on July 4, parents, guardians, grandparents and others will be able to contribute up to $5,000 a year after taxes until the year before the beneficiary turns 18. Babies born between 2025 and 2028 with Trump accounts will receive an initial deposit of $1,000 from the Treasury Department.

Employers are also allowed to contribute up to $2,500 per worker each year, which is part of the $5,000 contribution limit. Additionally, qualifying charities and state and local governments can make donations that don’t count toward the annual limit.

While Trump accounts may generally help children generate long-term savings, they may not eliminate the headwinds that girls may face in childhood when it comes to investing in their parents’ futures. A 2017 report from T. Rowe Price found that 50% of parents of only boys set aside funds for their child’s college, compared to 39% of parents of only girls.

The report found that parents of boys were more likely than parents of girls to pay for the full cost of college (17% vs. 8%) and were less likely to consider sending their boys to a less expensive university to avoid loans. They also tend to prioritize saving for their son’s college education over their own retirement, a T. Rowe Price study found.

In Trump’s account, the $1,000 seed money given to newborns regardless of gender shows that “each child deserves an asset,” Ghilarducci said. “But then family patterns can return…Public seeds cannot erase private biases.”

On the other hand, parents with children who have savings may be less likely to try to solve an emergency situation by sacrificing their own eggs.

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

Among focus group participants in a 2019 study by retirement services provider TIAA and Massachusetts Institute of Technology’s AgeLab, women in particular described “the struggle to sacrifice their own financial security in retirement to prioritize the education and well-being of their children,” the study said.

It remains to be seen how the children will ultimately use the money they save on their behalf. Trump accounts have different rules than individual retirement accounts, but the rules governing traditional IRAs generally apply once the beneficiary reaches age 18.

That means withdrawals will be taxed at regular tax rates, and, with some exceptions, withdrawals made before the beneficiary reaches age 59 1/2 will be subject to a 10% early withdrawal penalty, according to a June report from the Congressional Research Service.

These exceptions include higher education expenses, up to $10,000 for the purchase of a first home, up to $5,000 for the birth or adoption of a child, $1,000 annually for personal emergencies, tax-deductible medical expenses, and health insurance premiums during unemployment.