Does a Trump Account Affect Medicaid?

For families who rely on Medicaid, SSI, or other needs-based benefits, a Trump Account raises an important question: will this money count against us? The answer depends on your child's age, your state, and the specific program. Here is what we know.

Before Age 18: The Growth Phase

During the growth phase, Trump Account funds are held in trust under the control of the authorized individual (parent or legal guardian). The child cannot access the money. No withdrawals are allowed except in limited circumstances (rollovers, excess contribution corrections, or death).

Because the money is not accessible to the child, it may not count as an "available resource" for Medicaid or other means-tested programs. Many states define countable assets as resources the applicant can access and use. A locked trust account may not meet that definition.

After Age 18: Standard IRA Rules Apply

At age 18, the Trump Account converts to a traditional IRA in the child's name. At this point, the money is accessible (with taxes and potential penalties). How this IRA affects benefits depends on the program:

Medicaid

Medicaid asset rules vary significantly by state. Key considerations:

• Some states exempt retirement accounts (IRAs, 401(k)s) from Medicaid asset calculations entirely.
• Other states count IRAs as available assets, especially if the owner is not yet taking regular distributions.
• Medicaid expansion (under the ACA) uses income-based eligibility with no asset test for most adults under 65. In these states, the IRA balance may not matter.
• Traditional Medicaid (for aged, blind, and disabled) often has asset limits where IRAs could count.

Supplemental Security Income (SSI)

SSI has strict asset limits that apply nationally:

• Individual limit: $2,000 in countable assets
• Couple limit: $3,000 in countable assets

A traditional IRA generally counts as a resource for SSI purposes, especially if the owner can access the funds. After age 18, the Trump Account (now an IRA) could push someone over the $2,000 limit, potentially disqualifying them from SSI.

ABLE Accounts: A Possible Alternative

For children with disabilities, ABLE (Achieving a Better Life Experience) accounts offer a way to save without jeopardizing benefits:

• Up to $100,000 in an ABLE account does not count against SSI's $2,000 asset limit.
• ABLE account balances do not affect Medicaid eligibility regardless of amount.
• Funds can be used for disability-related expenses including housing, education, transportation, and health care.
• Eligibility: the disability must have begun before age 26.

If your child qualifies for an ABLE account, it may be a valuable complement to or alternative for a Trump Account, depending on your benefits situation.

Strategies for Families on Benefits

1. Open the Trump Account Anyway (Under 18)

During the growth phase, the locked account likely will not affect Medicaid or SSI. The 18-year compounding opportunity is significant. You can address the post-18 situation as guidance develops.

2. Plan for the Conversion at 18

Before the account converts to an IRA, work with a benefits advisor to understand your state's rules. Options may include spending down the IRA on allowable expenses, converting to a Roth IRA, or using ABLE account provisions.

3. Stay Informed as Guidance Develops

Given that millions of children will have Trump Accounts, there is a reasonable chance that federal or state agencies will issue specific guidance on how these accounts interact with benefits programs. We will update this page as new rules are published.

The Bottom Line

During the growth phase (under 18), Trump Accounts are unlikely to affect Medicaid because the funds are held in trust and not accessible. After age 18, the impact depends on your state and the specific benefits program. SSI is the most restrictive, with a $2,000 asset limit that a traditional IRA could easily exceed.

For families with children who have disabilities, ABLE accounts may offer a better path. For the full picture on how the account is taxed, see our FAFSA impact guide and gains taxation guide.