Trump Accounts May Not Fix This Major Retirement Problem for Women

Trump Accounts, investment accounts designed to help kids get a financial boost, might also help women get on track for retirement. According to research, though women save more of their paycheck than men do, women's 401(k) account values are consistently lower than men's. According to Vanguard's 2026 How America Saves report, men's average 401(k) balance at the end of 2025 was $194,597. In comparison, women's average balance was $146,476.

Here's what to know about how Trump Accounts work, the women's retirement gap, and how the accounts might factor into that gap.

The drivers behind the women's retirement gap

Several factors contribute to the women's retirement gap. According to the Labor Department, women earn 81 cents for every $1 that men earn; that lower pay puts women behind from the start.

Women are also more likely to be caregivers than men. A 2025 report from AARP and the National Alliance for Caregiving found that three in five caregivers were women. Since women are more likely to hold a caregiving role than men, they may spend more time out of the workforce, further putting their retirement savings behind.

How Trump Accounts function

Trump Accounts help children begin to build financial security through investing. They function like a starter IRA; the child owns the assets, but an adult acts on the child's behalf until they turn 18. Children under age 18 who have a Social Security number may receive a Trump Account. Additionally, children who are U.S. citizens born between January 1, 2025 and December 31, 2028 may receive a one-time $1,000 seed contribution from the Treasury. Children ineligible for the seed contribution may still have an account, but just don't receive that seed money.

Family members, friends, employers, and even charities may help fund the accounts for the child each year. Annual contribution limits apply – for example, any adult, like a family member, may contribute up to a combined total of $5,000 per year. Contributions from charitable organizations don't count toward the annual limit, so such contributions may help significantly boost the account's balance.

Since the account is a long-term investment tool, withdrawals generally aren't permitted before the child turns 18.

The retirement gap that Trump Accounts don't touch

Experts have mixed opinions about whether these accounts might affect the women's retirement gap. Though the seed money provides an initial boost to the account, it doesn't affect the fact that women tend to earn less money than men, putting them at a disadvantage when it comes to saving for retirement.

The accounts also don't address the caregiving factors that partially drive the investment gap. If women are increasingly responsible for caregiving, they may fall behind in earnings and retirement savings.

How Trump Accounts might help women preserve their own savings

The Trump Accounts might allow mothers to feel less pressure to solve financial emergencies by dipping into their retirement savings. TIAA and the Massachusetts Institute of Technology's Agelab 2019 research found that women often described sacrificing their retirement financial security to prioritize their children's education and wellbeing.

If children have a Trump Account with a growing balance that they could tap into for higher education costs, it's possible that mothers may be less likely to rely on their own retirement savings to cover education funding gaps.

What Trump Accounts don't change about investing in girls' futures

Though Trump Accounts may positively affect the women's retirement gap in some ways, traditional habits and behaviors may go unchanged regardless of the accounts. A 2017 T. Rowe Price survey found that 50% of parents with only boys had set aside funds for their kids' college. In comparison, just 39% of parents with only girls had set aside those funds. Additionally, 17% of parents of boys covered the entire cost of college, though just 8% of parents of girls covered the entire college cost.

Those attitudes toward saving suggest that girls may be at a financial disadvantage from an early age. Trump Accounts might not change those attitudes, and if parents save less for a girl's college, that girl may eventually take out more student loans and face higher expenses that erode her ability to save for retirement.

Why the accounts favor families that can contribute

It's also important to recognize that the structure of Trump Accounts favors families who are financially able to contribute to their children's accounts. The $1,000 seed money may be a good start for children who are eligible to receive it, but contributions from family, friends, and employers may really help those accounts grow.

As a result, a wide gap is fixed at birth between children in families that are financially able to contribute to their accounts and children whose families aren't able to contribute.

Bottom line

Trump Accounts may have a slight and indirect impact on some women's retirement balances, but additional factors must be addressed to actually close the retirement gap. Factors like lower education costs, caps on student loan interest rates, increased grant funding for women-owned businesses, enhanced financial education for women, and the increased availability of affordable childcare are all likely to provide the support women need to close that gap and build their retirement savings.

If you're uncertain about where you stand financially, consider speaking with a financial advisor or financial planner. A financial professional may be able to provide advice tailored to your specific goals, helping you make the right moves to plan for retirement.

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