A new financial plan called “Trump Accounts” has been introduced by President Donald J. Trump, under the “One Big Beautiful” bill. Though similar to past pandemic stimulus checks, this plan is not for immediate spending. Instead, it aims to help American children build wealth over time.
What Are Trump Accounts?
Every child born in the U.S. between December 31, 2024, and January 1, 2029 will receive:
- An initial government deposit of $1,000 into a savings account
- The account is managed by their legal guardian and invested in a stock market index fund
- Guardians can contribute up to $5,000 per year to grow the account
Expected Growth Over Time
According to estimates from the Milken Institute:
- After 20 years: ~$8,000
- After 40 years: ~$69,000
- After 60 years: ~$574,000
These projections assume steady returns from U.S. stock market index investments.
How It Differs from Stimulus
Unlike stimulus checks, which were one-time payments during the COVID-19 pandemic, Trump Accounts cannot be spent immediately. The money is intended for long-term financial growth.
Eligibility Requirements
To qualify, the child must:
- Be born between Dec 31, 2024, and Jan 1, 2029
- Have at least one parent or guardian with a valid Social Security number and work eligibility in the U.S.
When Can the Funds Be Used?
- Age 18: 50% can be withdrawn
- Age 25: Full access for education, entrepreneurship, etc.
- Age 30: Complete access for any purpose
Income Inequality Concerns
Since families with more money can contribute the maximum each year, their children’s accounts could grow significantly more—potentially widening wealth gaps. However, the program is universal, meaning no income test is required.
Cost and Funding
With approximately 3.6 million births per year, the government will spend around $3 billion annually on initial deposits alone. Costs may rise with birth rate changes or inflation.
Long-Term Impact
Proponents argue this creates generational wealth and financial security. Critics are concerned about affordability and fairness. True effectiveness will only be clear decades down the line.