For military families juggling PCS moves, deployments, and unpredictable schedules, knowing the account is professionally managed and federally regulated brings real peace of mind.

Who Chooses the Investments?

• Not parents — and not the IRS.
• Once Form 4547 is approved, your child’s Trump Account is assigned to an approved trustee, usually a financial institution authorized to manage IRA‑type accounts. That trustee makes all investment decisions on behalf of the child.
• Parents don’t pick individual stocks or funds. This design keeps the account simple, consistent, and compliant, no matter where military life takes you.

How Are Trump Account Funds Invested?

• Since Trump Accounts function like a traditional IRA for children, they follow standard IRA investment rules.
• Trustees may invest in:
  • Mutual funds
  • ETFs
  • Target‑date or age‑based portfolios
  • Other diversified IRA‑eligible pools
• They may not invest in:
  • Collectibles
  • Life insurance contracts
  • Direct real estate
  • Certain restricted or leveraged products
• For military families, this means the account stays aligned with mainstream, long‑term, retirement‑style investing — portable, regulated, and built for steady growth.

This Setup Helps Military Families

• This structure is designed to offer:
  • Professional management — one less account for you to track
  • Diversification — spreading risk across sectors
  • Consistent federal rules — no matter your duty station
  • Tax‑deferred growth until age 18 — more time for compounding
• Even without additional contributions, the federal pilot deposit alone can grow meaningfully. At an 8% annual growth rate, the initial $1,000 becomes over $3,900 by age 18. If left untouched until age 60, it can exceed $101,000 — a powerful head start for your young adult.

Why This Matters

A Trump Account isn’t meant to replace a 529 plan, family savings, or the TSP. It’s another layer of financial readiness for your household — portable across every PCS, low‑maintenance, and quietly growing in the background while you focus on the mission.

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Liquidity is simply how easily any asset can be turned into cash. Some assets are easier to convert into cash for a needed purchase or emergency than others. For example, a mutual fund is easier to liquidate than a car, and a car is easier to liquidate than a house.

Lenders will often compute a liquidity ratio of your finances in addition to your income to determine your ability to pay off a debt before loaning you more money for something like a car or home.

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Stocks, also known as equities, are securities that represent fractional ownership in a corporation. Share owners actually own a piece of the corporation that issued the stock, and are entitled to a proportional share of the assets and profits of the corporation. The value of a stock is affected by a number of variables, but is tied to the value and future profitability of the company, and can be rather volatile.

Bonds, on the other hand, are debt instruments. Businesses, localities, states, and nations use bonds to raise money by borrowing from investors. Think of it as an I.O.U. between the issuer and lender.  Bonds typically pay a fixed rate of interest (although some pay a variable rate), called dividends. These dividends are paid until the bond’s maturity date, at which time the amount of the “loan” is repaid. While bonds pay a fixed rate while held, the current value of a bond can change based on general interest rates, the amount of time until the bond’s maturity, and the potential of the borrower to default on the loan.

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The economy is a cycle of periods of growth and contraction. The term bull market means that the market is in a period of rising prices. According to Forbes Magazine, there have been 12 bull markets since 1957, averaging 59 months, with the market gaining about 20%.

A bear market is the opposite. It is associated with a time of declining market conditions and typically loses about 20% of its value. There have also been 12 bear markets since 1956, each averaging about 13 months.

Forbes says, “Bull markets are fueled by a number of different factors, including economic growth, low interest rates, a strong labor market and high consumer confidence. Bull markets and bear markets have occurred with predictable regularity over the past century, and both are a normal part of a healthy economic cycle.”

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There are many types of investment vehicles to choose from when building your investment portfolio. Different investment types have different objectives, and when put together in the right mix, your portfolio is better poised to grow over the years.

One way to build your portfolio is by dollar cost averaging. This is done by investing the same amount regularly over a period of time. It allows you to buy more shares of a stock, or fund, when the price is lower and fewer shares when the price is higher, reducing the effect of volatility. Regularly investing a set percentage of your pay in an IRA, 401K, or the TSP is dollar cost averaging. Making one contribution annually over many years is also dollar cost averaging.

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What is TSP? – The Thrift Savings Plan (TSP) is the retirement savings and investment vehicle for federal government employees and members of the uniformed services. Established by Congress in 1986, the TSP offers a service similar to private sector 401k plans. It allows you to set aside money for retirement in a wide selection of funds to meet your savings goals, timeframes, and risk tolerance.

How much can I contribute? – Employees and military members may contribute up to $23,000 in 2024. If you’re 50 or older you may also contribute additional “catch-up” contributions of up to $7,500. Military members assigned to a tax-exempt zone can make traditional tax-exempt contributions. The total that may be made is $69,000 including Traditional and Roth contributions, employer/agency matches, and tax-free combat zone contributions. The $69,000 does not include any catch-up contributions.

Is my contribution matched? – Military members who are enrolled in the Blended Retirements System (members with a Date of Initial Entry into Military Service (DIEMS) date of January 1, 2018, or later or eligible members with a DIEMS date of December 31, 2017, or earlier who elect (opt in) to be covered by BRS) will receive an automatic contribution of 1% of their basic pay from the DoD beginning 60 days from enrollment. After two years of service, the DoD will also match the service member’s contribution through the end of their 26^th year of service. The DoD matches your contribution dollar for dollar for the first 3% then 50 cents per dollar for the next 2%.

What are my investment options? – TSP offers five different types of individual funds, each with its own objectives, risks, and associated expenses. TSP also offers 10 different Lifecycle Funds that are mixes of the five individual funds, based on your anticipated retirement date, and managed to periodically grow less aggressive and more conservative as you approach retirement like how commercial target date funds work.

Individual Funds

G Fund – Government Securities Investment Fund – The objective is to ensure the preservation of capital and generate returns that are higher than what you can get through short-term U. S. Treasury securities. This is the safest of the funds because the fund’s principal and interest are guaranteed by the U. S. Government. This investment carries inflation risk, the possibility that the returns will not keep pace with inflation and reduce purchasing power.

F Fund – Fixed Income Index Investment Fund – The objective is to generate higher returns than available in short-term securities like the G Fund by investing in debt instruments like bonds issued by governments and corporations to generate income. The fund is designed to match the performance of the Bloomberg U. S. Aggregate Bond index. Bond investments carry market risk because the investments can fluctuate in value, credit default risk because the issuer may not be able to pay their debt, and inflation risk because the earnings may not be enough to offset inflation.

C Fund – Common Stock Index Investment Fund – This fund aims to offer the opportunity to gain from the equity ownership of stock in a broad market of large and mid-sized U. S. companies. The fund is designed to match the performance of the Standard and Poor’s (S&P 500) Index. This fund has market risk as the value of stocks rise and fall and inflation risk if the investments do not outpace inflation.

S Fund – Small Cap Stock Index Investment Fund – The objective of this fund is to offer the opportunity to experience the gain from the equity in small to mid-sized U.S. companies. This fund is designed to match the Dow Jones U. S. Completion Total Stock Market Index. As with other stock-based investments, this fund also carries market and inflation risk.

I Fund – International Stock Index Investment Fund – This fund offers the opportunity to invest in the ownership of non-U. S. companies and represents many developed countries. This fund’s objective is to match the returns of the MSCI EAFE (Europe, Australasia, Far East) Index. Risks include currency risk, the fluctuation of the value of foreign currencies in relationship to U. S. currency as well as market and inflation risk.

Lifecycle Funds

There are 10 Lifecycle Funds, each with a diversified mix of the five individual funds designed to get the best-expected return for the risk appropriate for your age. The 10 funds are named for the target year closest to your retirement date: 2025, 2030, 2035, 2040,2045,2050,2055,2060, and the L Income Fund. Once the year of the fund date is reached, the funds are rolled into the L Income Fund. Funds are reallocated each quarter to a lower-risk profile.  

What are the taxability options? – There are two types of tax treatment for your TSP, regardless of which funds you select, Traditional and Roth. Traditional contributions are made pre-tax and reduce your taxable income in the year of the contribution.  Traditional contributions reduce your current year’s tax in the year of contribution and grow tax-deferred until withdrawal when all withdrawals, including contribution and growth, are taxed in retirement. Roth contributions are made with after-tax dollars, do not offer a tax break, but grow tax-free until retirement. Roth withdrawals are not taxed in retirement.

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