The U.S. government has announced a new plan called “Trump Accounts” to support American families with young children. This is part of a new pro-family financial initiative introduced by President Donald Trump.
The plan promises a one-time $1,000 payment to families with babies born between December 31, 2024, and January 1, 2029. This money is meant to help these children build a strong financial future.
What Are Trump Accounts?
Trump Accounts are special tax-deferred investment accounts set up for children born within the eligibility period. Here’s how they work:
- These accounts will be owned by the child’s legal guardian, and the U.S. government will deposit a one-time amount of $1,000 into each account.
- These accounts will track a general stock market index, meaning the money will grow based on how the stock market performs over time.
- Families will also have the option to add up to $5,000 more each year from their own money into the account.
This setup allows the money to grow through compound interest—which means earnings are added to the investment, and then those earnings earn more over time.
How Are Trump Accounts Different?
This program is federal, which means it applies across the U.S., and it doesn’t have income limits. That’s different from other “baby bond” programs that exist in some states, which usually focus only on low-income families.
Because higher-income families may contribute more into these accounts each year, they might end up with much larger amounts saved over time.
Who Can Get a Trump Account?
- To qualify, the child must be born between December 31, 2024, and January 1, 2029.
- Also, at least one parent or guardian must have a valid Social Security Number that is authorized to work in the United States.
- After birth, families can apply to open a Trump Account for their child.
When Can the Money Be Used?
The money in Trump Accounts can’t be used right away. The goal is to let it grow for many years. Here’s when the child can access the funds:
- At age 18, the child can use up to half of the money.
- At age 25, the rest of the funds can be used, but only for special purposes like starting a small business or paying for college.
- By age 30, the person can access all the money freely, for any use.
How Much Can the $1,000 Grow Into?
According to the Milken Institute, a research group, that initial $1,000 can grow a lot over time if it’s invested well. Here’s what they estimate:
- After 20 years, it could grow to about $8,000.
- After 40 years, it might become $69,000.
- After 60 years, it could reach as high as $574,000.
That’s the power of investing early and letting the money grow for decades.
How Much Will the Program Cost?
Every year, around 3.6 million babies are born in the U.S. If each one gets a $1,000 deposit, the government will spend about $3 billion a year on this program.