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Is a newborn baby's financial future already funded? This is the aim of Trump Accounts. It has been a few months since the tax-advantaged investment accounts – created by President Donald Trump’s landmark One Big Beautiful Bill last year – went live. Despite everything that has transpired since Trump returned to the White House for a second term, this could be his lasting legacy.
70 Million Kids Have Trump Accounts
President Trump held an event in the Oval Office on Oct. 7, celebrating a key milestone for Trump Accounts, also technically known as 502A accounts.
Almost 70 million Trump Accounts have been created since the program’s July 4 launch, including 60 million through the Treasury Department’s automatic enrollment initiative announced last week. This was a major move by the administration as parents needed to opt in for these accounts.
This means every American child under 18 and with a valid Social Security number has an account in his or her name. Parents or guardians simply have to claim their child’s tax-advantaged investment vehicles on the Trump Accounts app (iOS or Android).
Over the last three months, these accounts have received about $2.2 billion. About half of the contributions were linked to the federal government’s $1,000 seed funds, and nearly a third ($638 million) came from direct contributions by friends and family. The remaining $291 million was philanthropic gifts.
The working class is largely benefiting from Trump Accounts. The White House estimated that 80% of these accounts are connected to families earning less than $200,000 per year.
The president is optimistic that today’s kids will become wealthy when they turn adults.
“If all goes well, which I think it will, they’ll end up being quite rich by the time they’re 18, and then 21, and as time goes by. This money is your child’s future. And when you were a child in the old days, your child would hit 18, and there’s nothing,” Trump said.
“Now, every member of the next generation will have an investment account and will benefit from our booming economy.”
Various administration and private-sector estimates suggest Trump Accounts could grow at a conservative pace or soar like an Elon Musk rocket.
Assuming no additional contributions, these accounts could grow to roughly $6,000 by the time a child turns 18. If parents or guardians contribute the maximum, these accounts could increase to anywhere from $300,000 to $1.2 million.
Inside Trump Accounts
Children born in the United States between Jan. 1, 2025, and Dec. 31, 2028, receive a $1,000 federal seed deposit in Trump Accounts. Families can add up to $5,000 after tax each year, and employers can contribute $2,500 pretax for their employees' children.
Funds inside Trump Accounts are required to be invested in low-fee funds that track a U.S. stock index. Funds are also capped at 0.1% in annual fees. Additionally, temporary Treasury regulations will allow stock donations to be contributed directly into a child's Trump Account.
The president also noted that autoenrollment expands access to philanthropic contributions by simplifying the donation process. Scores of US companies, from Chipotle to Bank of America, have pledged to contribute to these Trump Accounts.
Susan Dell, the wife of Dell Technologies CEO Michael Dell, says the company will deposit $250 into 25 million accounts this week.
“We believe in you, and we want you to dream big because we know you can make your dreams come true,” she said. “So, parents and grandparents, please claim your child’s account. These accounts are ready. They’re waiting for you, and they have money in them.”
Why This Matters
Gallup estimates that just 62% of US adults own stock – little changed from 30 years ago – and most of these individuals invest through retirement plans. The Federal Reserve estimates that just 37% of adults invest in stocks outside of these retirement accounts. But is this a financially viable way to travel through today's economy?
Despite various hiccups over the years, the US stock market has withstood anything: wars, a once-in-a-century global health crisis, recessions, and inflation. Owning assets has become a key to survival. By depositing cash in a bank account and earning a few cents per month, you risk seeing your hard-earned money lose value over time.
Trump Accounts can help young Americans achieve financial success by introducing them to the stock market and giving them an immediate advantage from their first breath.
