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10 Essential Things Verizon Employees Should Know About the Trump Savings Account
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'For Verizon employees, understanding how new savings rules fit within a broader long-term financial plan can help families make more informed decisions, and Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group, believes that evaluating these opportunities alongside your overall retirement and family goals is an important part of comprehensive financial planning.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.
'For Verizon employees, new savings opportunities are most effective when they are evaluated as part of a well-rounded long-term financial strategy, and Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group, encourages families to understand the rules and consider how these accounts align with their broader financial goals.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.
In this article we will discuss:
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How Trump Savings Accounts work and who can contribute.
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The rules for contributions, investments, withdrawals, and taxation.
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How Verizon employees can evaluate whether a Trump Savings Account fits into their family's long-term financial and retirement planning strategy.
On August 21 at 12 p.m. Eastern time, Denise will host a webinar titled 'Trump Accounts: What Every Advisor Needs to Know.' For Verizon employees planning for their family's future, understanding how this new savings account works can help you determine whether it belongs in your long-term financial strategy.
The Trump Savings Account is a savings account for children under the age of eighteen that was established by the One Big Beautiful Bill Act, which was signed into law on July 4, 2025.
The Trump account follows special guidelines up to the child's 18th birthday, but it takes many of its rules from the traditional IRA. The Trump account is then handled like any other traditional IRA. Before then, parents and guardians should be aware of its limitations, restrictions, and contribution deadlines. Verizon employees should understand these rules before opening or funding an account.
A parent or guardian, another person such as a friend or relative, an employer, the IRS in some situations, and an approved charity can all contribute to a Trump account. There are specific guidelines on the annual contribution cap and the timing of contributions, even though funding may come from a variety of sources.
Ten Important Things Regarding Trump Savings Accounts
1) Who Is the Trump Account's Owner?
The child owns the Trump account and is referred to as the beneficiary, much like in a 529 plan or an education savings account. The beneficiary is the legal owner, and all Trump account rules apply to that child.
2) What Types of Accounts Can Receive Contributions?
Only accounts that follow the tax code's traditional IRA structure are eligible to receive contributions to a Trump account. Employer contributions are not subject to the same operating procedures or notices as contributions to SEP or SIMPLE IRAs. Funds in a Trump account grow tax-deferred, while earnings generally become taxable when withdrawn.
3) How Much and Who Can Fund a Trump Account?
Parents, guardians, and other individuals may contribute up to $5,000 annually to a Trump account. Employers may contribute up to $2,500 for an employee or the employee's dependent under the age of 18, with the employer contribution counting toward the $5,000 annual limit. Verizon employees may want to determine how employer contributions fit within the overall annual cap.
The One Big Beautiful Bill Act also established a one-time federal government deposit of $1,000 for children born between January 1, 2025, and December 31, 2028. The child must have a Social Security number. This $1,000 deposit does not count toward the $5,000 annual contribution limit.
In addition, certain qualifying groups of children may receive contributions from charities and government programs that also do not count toward the $5,000 limit.
4) What Are the Contribution Deadlines?
Contributions to Trump accounts must be be made by December 31 of the contribution year.
Once the child turns 18, the account becomes a traditional IRA and follows the standard IRA contribution deadline, allowing contributions until the applicable tax filing deadline.
5) How Do You Invest in a Trump Account?
Investment options for Trump accounts are limited. Funds may only be invested in exchange-traded funds (ETFs) or mutual funds that track a qualified index, such as the S&P 500. Leverage is prohibited, and annual fees are capped at 0.1% of the account balance.
6) When Are Distributions Allowed?
With a few exceptions, distributions cannot be made before the child reaches age 18.
Exceptions include:
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- A transfer between Trump accounts for the same beneficiary.
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- A rollover to an ABLE account during the year the child turns 17.
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- The return of excess contributions.
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- Distribution following the beneficiary's death.
After age 18, standard IRA distribution rules apply, including potential early withdrawal penalties for distributions before age 59½ unless an exception applies.
7) How Are Distributions Taxed?
The tax treatment depends on the source of the contributions.
Non-taxable contributions made by parents, guardians, friends, or relatives create basis, which generally is not taxed when withdrawn.
Employer contributions, charitable contributions, and the federal $1,000 contribution do not create basis and generally are taxable upon withdrawal.
Investment earnings are also taxable when withdrawn.
Unless an exception applies, taxable withdrawals made before age 59½ may also be subject to a 10% early distribution penalty.
For example, if 40% of the account represents basis and 60% represents taxable funds, then each distribution generally will be treated as 40% non-taxable and 60% taxable. The IRS does not allow withdrawals to come only from basis first.
Only contributions made by the beneficiary, parents, guardians, friends, or relatives establish basis. Other contributions and all earnings generally are taxable upon distribution.
8) What Happens at Age 18?
The Trump account begins following all standard IRA rules during the year the child turns 18. From that point forward, the account owner must have eligible compensation to make new contributions.
Standard IRA rules regarding rollovers, transfers, basis aggregation, the one-rollover-per-year limitation, and future required minimum distribution rules also apply.
9) How Are Trump Accounts Reported?
The financial institution maintaining the Trump account must provide annual reports to both the account owner and the IRS. These reports include contributions, account balances, basis, rollovers, distributions, and the source of non-family contributions exceeding $25.
These reporting requirements continue until the child turns 17. After that, reporting follows standard IRA procedures.
10) When Can Contributions Begin?
By law, contributions cannot begin until one year after the One Big Beautiful Bill Act became law. As a result, July 4, 2026, is the earliest date contributions may be made.
Financial institutions will need systems designed to administer Trump accounts, including the ability to track basis accurately.
Remember to Be Aware of Penalties
It is important to remember that excess contributions, early withdrawals, and missed contribution deadlines may result in penalties.
If annual contributions exceed the allowable limit, the IRS may assess a 6% annual excise tax until the excess is corrected. Generally, the excess contribution and any associated earnings must be withdrawn.
With limited exceptions, withdrawals before age 18 are prohibited. After age 18, withdrawals made before age 59½ may be subject to the standard 10% early distribution penalty unless an exception applies.
For beneficiaries under age 18, contributions must be made by December 31 of the contribution year. Once the beneficiary turns 18, the contribution deadline changes to the IRA tax filing deadline. Missing the applicable deadline could result in the loss of that year's contribution opportunity.
Should You Consider a Trump Account for Your Child?
For children under age 18, the Trump account provides a tax-deferred savings opportunity. Once the child reaches age 18, the account functions much like a traditional IRA, although unique rules apply before then.
Families should carefully evaluate whether a Trump account, a 529 plan, a Roth IRA (if eligible), or another savings vehicle best aligns with their long-term objectives. For Verizon employees balancing retirement planning with family savings objectives, reviewing all available options can provide additional perspective when developing a comprehensive financial strategy.
If you have questions about how a Trump account may fit into your broader retirement and financial planning strategy, The Retirement Group can assist. Our team works with individuals and families to review retirement planning opportunities and coordinate long-term savings strategies. Call The Retirement Group at (800) 900-5867 to learn more.
Sources:
1. Internal Revenue Service. 'One Big Beautiful Bill Provisions.' Internal Revenue Service , U.S. Department of the Treasury, updated June 2026, https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions . Accessed 30 June 2026.
2. Internal Revenue Service. 'Treasury, IRS Issue Proposed Regulations on How to Open Initial Trump Accounts under the One Big Beautiful Bill.' Internal Revenue Service , U.S. Department of the Treasury, 6 Mar. 2026, https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-how-to-open-initial-trump-accounts-under-the-one-big-beautiful-bill . Accessed 30 June 2026.
3. KPMG Washington National Tax. 'Proposed Regulations: Guidance Regarding 'Trump Accounts' and Contribution Pilot Program.' KPMG , 6 Mar. 2026, https://kpmg.com/us/en/taxnewsflash/news/2026/03/tnf-proposed-regulations-guidance-regarding-trump-accounts-and-contribution-pilot-program.html . Accessed 30 June 2026.
4. Segal. 'Initial Guidance on Trump Accounts.' Segal , 7 Jan. 2026, https://www.segalco.com/consulting-insights/initial-guidance-on-trump-accounts/ . Accessed 30 June 2026.
5. 'There's a 'Trump Account' Hack That Can Unlock Decades of Wealth-Building for Your Kid.' MarketWatch , June 2026, https://www.marketwatch.com/story/theres-a-trump-account-hack-that-can-unlock-decades-of-wealth-building-for-your-kid-b84188b6 . Accessed 30 June 2026.
How does the Verizon Pension Plan facilitate retirement income for long-term employees, and what specific benefits can employees expect when enrolling in the retirement program provided by Verizon? What unique features does the Verizon Pension Plan offer compared to other retirement plans an employee might have encountered, and how can employees maximize the benefits of these features throughout their career at Verizon?
Verizon Pension Plan Benefits: Verizon's Pension Plan offers substantial benefits aimed at facilitating a secure retirement for long-term employees. Upon enrolling in the retirement program, employees can expect defined benefits that are based on their salary and years of service, ensuring a predictable and stable income after retirement. Unique to Verizon, compared to some other plans, may include options for early retirement under certain conditions and a choice between annuity payments or a lump-sum distribution upon retirement. Employees can maximize these features by planning for long-term service and considering their retirement income needs early in their careers.
In what ways can employees at Verizon strategize their rollover decisions when transitioning from the Verizon Pension Plan to other retirement savings plans upon leaving the company? What factors should be considered by Verizon employees to ensure they are making informed choices regarding rolling over funds to a traditional IRA or another qualified employer plan?
Rollover Strategies: When transitioning from the Verizon Pension Plan to other retirement savings options upon leaving the company, employees should strategize their rollover decisions carefully. Factors to consider include the tax implications, the investment options available in the rollover destination, and the timing of the transfer to avoid penalties. Verizon employees should evaluate the benefits of rolling over to a traditional IRA or another employer's plan, considering their future financial needs and retirement goals.
What are the implications of the recent IRS limits for 2024 concerning contributions to retirement plans for Verizon employees, and how does Verizon align its offerings with these federal regulations? Additionally, how can Verizon employees best take advantage of these limits to enhance their retirement savings while adhering to tax regulations?
IRS Contribution Limits: The implications of IRS limits for 2024 are critical for Verizon employees as these limits dictate how much can be contributed tax-deferred into retirement plans. Verizon aligns its offerings with these federal regulations by adjusting contribution limits in their plans accordingly. Employees are encouraged to maximize their contributions to take full advantage of tax-deferred growth, especially when IRS limits increase, thereby enhancing their retirement savings while adhering to tax regulations.
How does the special tax treatment for lump sum distributions from the Verizon Pension Plan affect employees who receive their benefits early or have specific circumstances, such as being born before 1936? What options do these employees have to manage their tax burden effectively, and how can they best navigate these complicated rules while planning for their retirement?
Tax Treatment of Lump Sum Distributions: The special tax treatment for lump sum distributions from the Verizon Pension Plan can significantly affect employees who opt to receive their benefits early or under specific circumstances like being born before 1936. These employees have options to manage their tax burden effectively by opting for ten-year averaging or capital gain treatment on eligible distributions, allowing for a potentially lower tax rate on their pension benefits.
For surviving spouses and alternate payees of Verizon employees, what are the specific benefits available under the Verizon Pension Plan? How do these benefits compare to those available to employees, and what steps must surviving spouses or alternate payees take to ensure they receive their entitled benefits without delays or complications?
Benefits for Surviving Spouses and Alternate Payees: For surviving spouses and alternate payees, the Verizon Pension Plan offers benefits similar to those available to employees, such as annuity payments or lump-sum options. These beneficiaries must take certain steps to ensure they receive their benefits without delays, such as providing necessary documentation and adhering to plan rules. The plan details and processes for claiming benefits should be clearly understood to avoid complications.
How can Verizon employees utilize the resources available through the Verizon Benefits Center to better understand and manage their retirement benefits? What specific tools and services does the Benefits Center provide, and how can these resources assist employees in making informed decisions regarding their pension plan options?
Utilizing Resources at the Verizon Benefits Center: Verizon employees can utilize various tools and services provided by the Verizon Benefits Center to manage and understand their retirement benefits. The Benefits Center offers personalized consultations, detailed plan documentation, and tools for estimating pension benefits and planning retirement income, assisting employees in making informed decisions about their pension plan options.
What challenges might Verizon employees face regarding eligibility and tax withholding when receiving their pension payments, and how can they mitigate these issues? It's crucial for employees to understand the mechanics of eligibility regarding rollovers and payment processing; what key pieces of information should they be aware of to avoid unexpected taxes?
Challenges in Eligibility and Tax Withholding: Verizon employees might face challenges regarding eligibility and tax withholding when receiving pension payments. Understanding the plan's criteria for eligibility, the implications of rollovers, and the impact of mandatory withholding on distributions is crucial. Employees can mitigate these issues by consulting with the Verizon Benefits Center or a tax advisor to ensure compliance and avoid unexpected taxes.
What is the process for Verizon employees wishing to initiate a direct rollover from the Verizon Pension Plan, and what documentation will they need to prepare? Can employees receive assistance from the Verizon Benefits Center during this process, and how does using a direct rollover benefit them compared to other forms of payment?
Direct Rollover Process: The process for initiating a direct rollover involves deciding the destination of the rollover (traditional IRA or another employer plan), completing necessary documentation, and potentially seeking assistance from the Verizon Benefits Center. A direct rollover helps in avoiding immediate taxes and maintaining the tax-deferred status of retirement savings.
In terms of retirement preparedness, how does the pension plan at Verizon accommodate employees’ needs for financial security in their senior years? What additional education or resources does Verizon provide to assure that employees fully understand their retirement options and the importance of planning ahead?
Retirement Preparedness: Verizon's pension plan is designed to accommodate the financial security needs of employees in their senior years. In addition to the pension benefits, Verizon provides educational resources and planning tools to ensure employees understand their retirement options and the importance of early and consistent retirement planning.
How can employees reach out to the Verizon Benefits Center for further information about the pension plan and other retirement benefits? What specific contact methods are available to employees, and how can these interactions enhance their understanding and management of retirement benefits provided by Verizon?
Contacting the Verizon Benefits Center: Verizon employees seeking more information about their pension plan and other retirement benefits can reach out to the Verizon Benefits Center through various contact methods such as phone, email, or online portals. These interactions are crucial for enhancing understanding and effective management of retirement benefits, ensuring employees make the most of the benefits available to them.
For more information you can reach the plan administrator for Verizon at one verizon way Basking Ridge, NJ 7920; or by calling them at 908-559-3342.
https://www.verizon.com/documents/pension-plan-2022.pdf - Page 5, https://www.verizon.com/documents/pension-plan-2023.pdf - Page 12, https://www.verizon.com/documents/pension-plan-2024.pdf - Page 15, https://www.verizon.com/documents/401k-plan-2022.pdf - Page 8, https://www.verizon.com/documents/401k-plan-2023.pdf - Page 22, https://www.verizon.com/documents/401k-plan-2024.pdf - Page 28, https://www.verizon.com/documents/rsu-plan-2022.pdf - Page 20, https://www.verizon.com/documents/rsu-plan-2023.pdf - Page 14, https://www.verizon.com/documents/rsu-plan-2024.pdf - Page 17, https://www.verizon.com/documents/healthcare-plan-2022.pdf - Page 23
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